China's social security reforms and the comparative politics of market transition

Abstract

China has undergone market transition like the countries of central Europe, but under continued one-party rule rather than democratic politics. What have been the consequences for its social security system? Like the post-communist central European states, China has introduced unemployment insurance and new means-tested poverty assistance, and has reduced state enterprises’ role in delivering social security. It has also reformed pensions and health insurance in the direction of mandatory, contributory social insurance. However, there is greater urban bias in China’s social security, benefits have been more eroded, and unemployment insurance and means-tested poverty assistance have been introduced relatively late in a more protracted reform process. There are similarities between China and post-communist central Europe due to the common experiences and constraints of market transition, demography, vested interests and ideology. The differences lie in China’s distinctive rural, agricultural starting-point, lower per capita GDP, pre-reform system of enterprise-based social security provision, continued one-party rule and decentralized fiscal system. Although only one among a range of influences, political systems have been an important shaper of social policy. Paradoxically, however, pre-transition social security provisions may have been better preserved under post-communist governments than under continued communist party rule.