Social SecurityConsumption

Social Security/Consumption

China is the world's largest developing country with a huge population, weak economic basis and unbalanced development among regions and between rural and urban areas. Perfecting the social security system is an arduous and heavy task.The Chinese Government has, with its people-first focus, attached great importance to the establishment and improvement of the social security system. According to the statistical communiqu up to the end of 2005, 174.44 million people were covered by urban basic old-age insurance, an increase of 10.91 million over the previous year. Of these, 130.82 million were employees and 43.62 million, retirees. By the end of 2005, 137.09 million people had participated in the basic medical insurance program, an increase of 13.05 million over the previous year.

This included 99.59 million employees and 37.5 million retirees. Unemployment insurance and work injury insurance covered 106.48 million and 83.9 million people respectively, an increase of 640,000 and 15.45 million over the previous year.

By the end of 2005, basic old-age insurance covered 40.02 million participating retirees of enterprises and the pensions were paid on time and in full. Laid-off workers entering the reemployment service centers in 2005 were provided with basic living allowance on time and in full, and their social insurance premiums were paid by those service centers. By the end of 2005, 3.62 million people benefited from unemployment insurance benefits. A total of 22.33 million urban residents received the minimum living allowance for the whole year, an increase of 278,000 over the previous year.

Social welfare institutions offering adoption services were equipped with 1.5 million beds and took in 1.16 million people. Of the 170,000 community facilities built in urban areas, 9,705 were comprehensive community service centers. In 2005, welfare lotteries raised 41.1 billion yuan, while social welfare funds contributed 14.4 billion yuan and direct donations, 2.9 billion yuan.

Between 2000 and 2005, the total income in, and expenditure from, the social insurance fund in China was nearly 700 billion yuan and more than 540 billion yuan, respectively. This helped guarantee workers their legal rights and benefits and played an important role in maintaining social stability and promoting economic development and social harmony.

Work Safety

The whole year saw 127,000 people killed in worksite accidents, down by 7.1 percent over the previous year. The number of deaths per 100 million yuan of GDP was 0.7, down 18.5 percent; the number of deaths per 100,000 workers engaged in second and tertiary industry was 3.85, down 6.8 percent; and the number of deaths per 1 million tons of coal mined was 2.81, down 8.7 percent over the previous year. The year saw 450,254 road accidents that resulted in 99,000 deaths, 470,000 people with injuries and direct economic losses of 1.88 billion yuan. The number of deaths per 10,000 cars of road traffic was 7.6, down 23.7 percent over the previous year.


In 2003, China's GDP per capita reached US$1,000 at the prevailing rate of exchange, indicating a step up in China's consumption structure. Today China's consumers are spending their money on education, housing, automobiles, computers, stocks and overseas travel. Living conditions have further improved. Clothing, food, housing and transportation show the greatest changes, reflecting greater concern for fashion, nutrition and home comfort. Traveling by taxi or in one's own car has become commonplace.

The Engel coefficient (food expenses as a percentage of total consumer spending) fell from 39.4 percent in 2000 to 36.7 percent in 2005, and although having not reached, but is gradually approaching developed countries' 30 percent; among rural households it fell from 49.1 percent to 45.5 percent.

People have more and better-quality consumer goods. Big-screen HD color TVs, fridge-freezers, and automatic washing machines have become the city dweller's first choice when replacing old household appliances. Air conditioners, home entertainment units, water heaters and exercise equipment also are popular consumer items; cars, video cameras and computers are becoming commonplace in the average home.

In 2005, car sales in China increased by 21.4 percent. Of every 100 cars sold, at least 60 were bought by individuals, and in big cities the rate was over 80 percent. Expenditure on housing has also kept increasing, by over 30 percent nationwide in 2005. The average per capita living area for urban residents was 26 sq m and for rural residents nearly 30 sq m.

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