Date
17 October 2017
China Exits Slowdown As Quarterly Growth Tops Forecasts

The Big Picture: PENSION INSURANCE SYSTEM

The central government will merge China’s rural and urban pension insurance schemes to create a single nationwide program, the State Council said after a weekly meeting chaired by Premier Li Keqiang {李克強} on Feb. 7.

The move is designed to standardize the schemes in the city and the countryside, as well as increase social mobility, improve social security, boost domestic consumption and encourage people to set up new businesses, the cabinet said. It will ultimately help advance the country’s industrial, digital, urban and modern agricultural causes.

The new pension insurance plan will be funded by individuals, charities and governments. Beijing will cover all of the government’s share in central and western provinces but only half in the east, with the rest paid by local governments.

Local governments will also encourage charities to contribute to schemes for people with severe disabilities, the State Council said.

The central government launched a rural social pension insurance scheme in 2009 and met its goal of covering all needy people in the countryside within three years. The result was better than expected as it was originally projected to take a decade to reach full coverage.

But, Zheng Bingwen {鄭秉文}, director of the World Social Security Research Center at the Chinese Academy of Social Sciences, said it would be technically difficult to combine the rural and urban schemes because the metropolitan program has more detailed payment requirements.

Some rural pension insurance schemes even allow people who have never contributed to their own accounts to receive benefits. Zheng said it would be unfair to urban contributors if all schemes were merged, and the central government needs to step in to find a solution.

Smart bank cards extend payment reach, paper says

Smart bank cards, also known as integrated circuit or IC bank cards, can now be used for personal identification and payment of services such as transport and medical services in 63 more cities, including Beijing, Nanjing and Qingdao, the China Securities Journal reported Monday. The scheme was launched in 47 cities in June 2011. At least 380 million IC cards had been issued as of September, the report said.

PBoC vows to maintain adequate liquidity, report says

The People’s Bank of China will use various monetary policy tools to maintain liquidity at an adequate level and achieve reasonable credit and social financing growth, China.com reported Sunday. It will manage liquidity in the banking system through open market operations, adjustments to the reserve requirement ratio, relending and rediscounting. The central bank also pledged to improve communication with the market and the public to stabilize expectations and interest rates. It will also work on interest rate liberalization and reform of the renminbi exchange rate mechanism, the report said.

–Contact HKEJ at [email protected]

JP/SK

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