The Urban-Rural Integration Reform Is Underway
By staff reporter LUO YUANJUN
AT an executive meeting on February 7, 2014 presided over by Premier Li Keqiang, the State Council, China's cabinet, decided to merge the two separate old-age insurance schemes for rural and urban residents into a unified pension system, marking a major breakthrough in urban-rural integration. Previously, China had different pension schemes for civil servants, urban employees, urban residents and rural dwellers. The new pension program is a long-awaited reform, bringing an end to the country's urban-rural dual structure.
Better Social Security for Farmers
Xiao Jun, a migrant worker from Chongqing in southwestern China, has been roaming from one city to another in the Pearl River Delta for a dozen years, working over 10 hours a day. His monthly wage has steadily climbed from a few hundred Yuan to over RMB 2,000 during the past years; but still, his savings are meager. "I spent most of my earnings on my family. So I have nothing to fall back on in my old age – except my children," he said.
It is commonplace in China's countryside that seniors rely on their adult children for financial support. Annuities for rural residents didn't appear in China until 1992 when the Ministry of Civil Affairs promulgated an outline for a trial implementation of a social pension system for farmers at county level. The program was later adopted by some regions, but eventually fizzled out as the funds came solely from pensioners' contributions, which made the plan nothing more than a glorified bank deposit system. Farmers saw no point in joining it when the expected retirement benefits would, in fact, come entirely out of their own pockets. What's more, in the early 1990s average rural income was low. Few families had extra money to put aside for something they would need 30 or 40 years down the line when they were struggling to pay for daily necessities in the here and now.
In September 2009, the State Council trialed a new old-age pension system for rural residents in parts of China. Under the policy, participants regularly contributed a premium, which they decided, to individual insurance accounts that were also funded by central and local governments and in some regions, the participants' communities. On reaching 60 years of age, policyholders could start to receive payments from their accounts plus a RMB 55 "basic pension" from the state. Farmers who were 60 or over at the inception of the program were still entitled to the basic pension despite having made no personal contributions. By 2012 this program had largely covered the entire rural population of China.
Balanced Rural-urban Development
Every year the "No.1 Central Document," the first policy document issued by the Central Committee of the Communist Party of China and the State Council, signifies the priorities of government work in the year. This year, amid other reforms, the government vows to improve the mechanisms for coordinating urban and rural development by improving rural living conditions and providing equal basic public services in urban and rural areas. The goal is to ensure even exchanges of production factors between the city and the countryside to give farmers equal access to the modernization process and its benefits.
This demands replanning of urban-rural development that can improve the distribution of industrial projects in cities and urban areas to utilize their respective advantages, boost free flow of urban and rural labor, and ensure rational use of key production factors such as capital, land and technology. In 2009, Zhuozhou City of Hebei Province was selected as a testing ground for this restructuring.
According to the city's plan for its downtown area, towns and villages, its territory of 742 square kilometers are divided into a central area, five clusters of bigger towns and 49 conglomerations of smaller towns that cover all 404 administrative villages. This layout is expected to stimulate population flow from rural neighborhoods that scatter sparsely across the region to towns, where new communities with modern amenities will be built.
By pooling together the residents of several villages, these new communities can make better use of land, and are able to make overall plans for housing, transport, and infrastructure of utilities, communications, education, public security and recreation. Each will build a kindergarten, a primary school, an elderly care home, a hospital and a sewage treatment plant. And every household will have their own garages and warehouses. This concentration of population and resources helps foster a more efficient and convenient lifestyle.
Zhuozhou is also experimenting with the farm economy pattern in the agricultural sector, which merges small plots of farmland contracted to individual rural families through land transfer and establishes bigger plantations by introducing corporate investment and modern management. The city strenuously solicits urban capital to invest in such plantations, which creates jobs for resident farmers, boosting their incomes and bringing about favorable interactions between industrialization and the rural population.
In short, the replanning for urban and rural areas aims to achieve optimal allocation of resources and the maximum use of infrastructure and public services, and to assign cities and the countryside respective roles they can best play in national economic and social development. This can make the best out of resources and capital, improve livelihoods and the eco-environment and create better living and working conditions in rural areas.
Equal Access to Public Services
At the national educational work meeting on January 15, 2014 Education Minister Yuan Guiren told participating officials that China will make overall arrangements of resources for compulsory education (totaling nine years from primary school to junior middle school) in urban and rural areas to ensure their even distribution, and improve school facilities and teaching quality in the countryside. The state will increase funding to rural primary and junior middle schools that fall below standard as well as the subsidy for rural students, the minister said.
In addition to education, China is also working to give its rural residents equal access to employment, public services and social security as city dwellers, leveling the ground for all citizens to equally participate in the modernization drive and enjoy its fruits. This is the ultimate goal of the urban-rural integration reform.
Chengdu, capital of Sichuan Province, was the first city in China to abolish the hukou household registration system that divides residents into "urban" and "rural." Starting in 2004 all permanent residents in the city were registered as just "resident," and this change was applied to the whole local population by the end of 2006. The institutional obstacle for farmers to enjoy equal access to public services was effectively torn down.
Under the new policy, though no longer tagged "rural residents," farmers can retain the right of use to their contracted lands and entitlements to collective assets of their respective villages. Those who voluntarily relinquish their assigned homestead in the village and move into cities and towns are eligible for public housing.
Changsha City of Hunan Province took the lead in administering unitary medical insurance for its urban and rural residents. This practice has the merits of placing insurance funds under uniform management, collecting and publishing information on a single platform, and allowing same payment policy for all insured, which contributes to social justice.
In 2012, the medical insurance schemes for Changsha's urban and rural dwellers were fused into one. This change significantly expanded the range of medical services and providers as well as medications covered by the insurance for rural residents. In Changsha County, for instance, rural policyholders are entitled to 2,421 medicinal products, almost double the previous 1,300, that are paid for by their insurance, and 68 local hospitals have joined the insurance plan.
Social changes always take place in tandem with economic transformation of a society. Such is manifested in the gap between China's urban and rural development. This chasm is found in education, health care, social security and other realms. The overriding priority of China's urban-rural integration reform is to close this gap and realize balanced development in its cities and countryside.
