Reforming the Welfare System in the People’s Republic of China

Abstract

This paper reviews the recent progress in welfare system reforms in the People’s Republic of China and looks at the experiences of Japan and Republic of Korea in establishing their modern welfare systems. The paper highlights three priorities for further reform of the People’s Republic of China welfare system. The first is to reduce its dualistic nature by eliminating differences between urban and rural areas in policies, institutional arrangements, coverage, and welfare provisions. The second is to rationalize government social security and welfare expenditures. The third is to rationalize the overall management of the welfare system by (i) reforming the existing compartmentalized government administration of urban cities and rural areas; (ii) encouraging better coordination among various government agencies involved in policy making and administration of the welfare system; and (iii) making the targeting of poverty reduction and social welfare programs more effective.