Worker Response to Chinese Pension System Reform
Author: JING JIAN XIAO, SHUNFENG SONG, and YINZHOU XU
Published in IJED, Vol. 1 No. 4
This study examines workers’ responses to the current reform of social security in China. Based on a survey conducted in June,1998 among 500 workers with various backgrounds in Guangzhou (Canton), the paper draws seven conclusions. First, over eighty percent of workers support the reform. Second, there is consensus that the responsibility for providing old-age insurance should be shared among individuals, society, and the government. Third, workers prefer a partially-funded pension system to either the pay-as-you-go system or a fully-funded system. Fourth, most workers do not want the government to increase the legal retirement age at the present time. Fifth, a majority of workers worry about their future retirement income adequacy and consider it a potentially serious social problem. Sixth, workers perceive that state-owned enterprises offer the best pension plans while foreign-owned companies provide the worst. Finally, the survey shows that most workers desire, and would participate in, a program that would educate them about investment alternatives. These findings provide important insights for both Chinese policy-makers and future research into China’s social security reform.