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System prioritizes human dignity, expert says

By LI LEI | CHINA DAILY | Updated: 2026-01-14 07:17
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Over seven decades, China has reshaped its social safety net, moving from a welfare system tied to state employment to a comprehensive, market-oriented framework that now covers almost its entire 1.4 billion population — a transformation experts believe channels collective resources to manage individual risks.

Its foundation lies in the "five insurances" — pension, healthcare, unemployment, work injury and maternity coverage — alongside the housing provident fund.

These contributory programs are bolstered by social assistance mechanisms such as dibao (the minimum living allowance) and medical aid, which support low-income families and people with disabilities.

The system originated in the early years of the People's Republic of China, founded in 1949, when State-owned enterprises directly provided employees with pensions, healthcare, housing, and other benefits.

Following market reforms in the 1980s, China began experimenting with social pooling for pensions and healthcare, gradually untangling welfare from specific employers.

A legal cornerstone was laid in 1994 with the passing of the Labor Law, which formalized the social insurance framework.

The most significant expansions came later: the 2003 launch of the new cooperative medical scheme extended health coverage to rural residents, while the 2009 introduction of the new rural pension scheme brought pensions to the countryside.

These programs were later merged with their urban counterparts, cementing welfare as a citizenship-based right.

Yang Yifan, a social security expert at Southwest Jiaotong University, describes the system as a "high-resilience floor", designed to use State-led collective action to distribute and mitigate fundamental life risks that individuals cannot bear alone.

He points to the basic medical insurance system — covering about 95 percent of the population and funded largely by fiscal subsidies — as a "firewall" against medical impoverishment, a leading cause of family financial collapse.

In enforcement, the system emphasizes protecting a basic livelihood. For example, when recovering improperly distributed benefits, some localities have adopted "protective execution" for severely ill patients with no means to repay, ensuring their survival and medical needs are not compromised.

"This reflects how the system prioritizes human dignity over rigid procedural correctness," Yang said.

The ongoing effort to make pension and healthcare funds portable across regions — long fragmented and managed by local authorities — and to enable transfers from wealthier areas to those with weaker contribution bases, embodies a governance philosophy rooted in mutual aid and solidarity, he added.

China's poverty alleviation efforts, which have lifted over 800 million people out of extreme poverty since the early 1980s, have operated in tandem with the country's expanding social safety net to mitigate risks for vulnerable households, experts said.

This year marks the fifth anniversary of China's declaration of eradicating extreme domestic poverty, a milestone that has shifted the nation's focus toward the comprehensive vitalization of rural areas.

Wu Haitao, a poverty studies expert at Zhongnan University of Economics and Law, said that the success stems in a large part from China's multidimensional and dynamic understanding of poverty, which extends beyond income to include deficits in education, healthcare, and social participation.

In practice, the strategy integrates a tiered and categorized social assistance system with regional cooperation and industrial development, forming a closed-loop mechanism spanning poverty prevention monitoring, industrial growth, and social security, he explained.

Wu said the fundamental distinction lies in China's people-centered modernization model.

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