Tools for comparing EU and China social security systems

1. Tools for comparing EU and China social security systems • There is not a single EU social security system or model • New member states join the Union with various backgrounds • Current schemes and systems are the result of up to one hundred years and more of progressive developments in national context • Comparing the Chinese social security system with individual European schemes would represent a huge task, and maybe a meaningless one.

2. Tools for comparing EU and China social security systems • European Countries however share or endorse a set of common principles/benchmarks applying to social security. • Those are embodied in various EU communications of the commission to the council as well as in the European Code of Social security (Council of Europe instrument) • Those principles were explicitly endorsed by 40 European countries directly (ratification of the Code) or indirectly (ratification of European social charter) • The Open Method of Coordination (OMC, from Lisbon Strategy) would have been impossible to envisage in the absence of this common stand.

3. Tools for comparing EU and China social security systems • .Those principles/benchmarks include the following core 10 areas: • uniqueness of the system • continuity in protection • coexistence of basic and multi-tier protection • progression towards universal coverage • good governance requirements • democratic management • affordability of sustainable financing • guaranteed level of benefits • rule of law and right of appeal • overall State responsibility

4. Tools for comparing EU and China social security systems • Unique social security number. • Cross checking among schemes: one single form filled in by employer I - One country, one system • Incorporation under one scheme implies incorporation under other schemes • Entitlement to benefits under one scheme entails accrual of rights under other schemes

5. Tools for comparing EU and China social security systems • Changing profession, changing scheme, vesting rights. • Changing country, changing system, vesting rights, paying abroad II - Continuity in Protection • European vesting system extended to non nationals (2003) • Non contributory periods if involuntarily not covered through contributions

6. Tools for comparing EU and China social security systems • Basic protection as citizen’s entitlement. • Secondary level protection compulsory, 3rd level optional III - Coexistence of basic and multi-tier protection • Supplementary benefits may come from law or collective agreements at national, branch or entreprise level • Qualifying conditions to access secondary level linked to those for first level

7. Tools for comparing EU and China social security systems • Convergence of non contributory and contributory systems • Progressive equalization of qualifying conditions and benefits among schemes IV -Universal coverage • Coverage of nine contingencies, additional contingencies • Link between social assistance and social insurance

8. Tools for comparing EU and China social security systems • Monitor administrative costs • Internal and external controls V -Governance • Computerization and public access • Government tutelage, Parliament supervision

9. Tools for comparing EU and China social security systems • Contributions belong to contributing persons • Protected persons associated to management VI -Democratic Management • Beneficiaries may seat on governing bodies • Annual and other reports made available to the public

10. Tools for comparing EU and China social security systems • Contributions should not be too high • Financing to be shared employers-employees • Government responsible to ensure that legal benefits are paid and financed VII - Affordability • Actuarial studies to be conducted periodically and whenever changes are being considered

11. Tools for comparing EU and China social security systems • Guaranteed replacement rate or absolute level • Rate to progress with economic development • Benefits in kind: related to their social goal VIII - Level of benefits • Payable throughout the contingency

12. Tools for comparing EU and China social security systems • Clearly established and widely disseminated rights and entitlements • Justify decisions IX - Rule of Law • Right of appeal, special courts • Advisers for insured persons and beneficiaries

13. Tools for comparing EU and China social security systems • Rules and regulations also for non government schemes • Government to ensure continuity and performance of the system X - State Responsibility • Government to ensure that consultation among social partners take place • Government to promote preventative measures in case of risk of system insolvency or unsatisfactory results

14. Tools for comparing EU and China social security systems • There are obvious gaps between Chinese and European levels of social protection • Some differences are due to unequal levels of development, others not Conclusions • Would be important to clearly identify possible remedial measures, and plan for implementation • Systemic approach of role and objectives of social security still uncompleted