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Experts urge stimulus package on social welfare

By Tan Yingzi (China Daily)
Updated: 2009-06-24 07:54

Experts in the country suggested the Chinese government considers launching a second stimulus package focused on social welfare, including social security and education, in response to the global financial crisis, which was "far from over".

Policies in social welfare, education, healthcare, social security and housing play an important role in controlling the economy, in addition to having a huge impact on the development of society, experts told a summit entitled "China's Social Policy during the Global Financial Crisis", organized by the Chinese Academy of Social Sciences (CASS) in the capital on Monday.

"Creating effective social demand is the permanent cure to the current crisis," said Ding Yuanzhu, a professor at the China National School of Administration.

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"A large number of Chinese people save money, creating massive potential for consumption. But only through proper social policies can that potential be tapped," he said.

Guan Xinping, director of the department of social work and social policy from Nankai University said the Chinese government's intervention during the crisis focused on economic issues, but it did not consider chalking out ways to "promote long-term sustainable development or setting up substantial social systems".

Guan suggested the government invests more to "educate and train the country's youth and unemployed population, speed up the establishment of a basic social security system and strengthen public services".

"The government is paying too much attention to infrastructure construction, but isn't focusing on powering up human capital," Guan said, adding that the country needed a balance in economic and social development.

Gong Sen, a researcher at the Development Research Center of the State Council said that crisis was an opportunity for China to improve upon its social policy.

"Fundamental changes in China's development mode are not possible without a sound social security system," Gong said.

The global financial crisis has taken its toll on China's job market, with thousands of labor-intensive factories in the export sector either closing down or cutting staff.

China's urban registered unemployment rate hit 4.3 percent, 0.1 percentage point higher than the first quarter. The Ministry of Human Resources and Social Security has predicted the figure will touch 4.6 percent this year, the worst in three decades.

In order to boost domestic consumption and create jobs, the country has launched a massive spending program contained within the 4-trillion-yuan ($570 billion) stimulus package focused on 10 major areas, including low-income housing, rural infrastructure, water, electricity, transportation, environment and technological innovation.

Experts said China could get some good ideas from social policies adopted in other major economies.