Chinese companies want to pay less social security contributions. (Photo : Getty Images)
The National Development and Reform Commission website indicated that Chinese companies are paying too much on social security premiums and are looking for ways to cut cost.
There are five types of insurance policies that are being paid by companies. These are the mandatory pension, medical insurance, industrial injury insurance, unemployment insurance and maternity insurance.
China has one of the largest social security contributions per worker. The country is ranked at the top 13, and requires contributions that are bigger than some European countries and the U.S. Total contributions are being paid by enterprises.
Yang Jianhua, director of the Center for Public Policy at the Zhejiang Academy of Social Sciences, said, "A few years ago, when the domestic economy was relatively robust, social security spending was already a big cost for many private companies. Nowadays, with a sluggish global and domestic economy, the problem has become grim."
If the government allows the reduction in payments, the NDRC said that companies will be saving as much as 150 billion yuan.
Yang added, "Generally speaking, the Chinese government's fiscal expenditure on social security is at a relatively low level. Additionally, the government's welfare spending is uneven, with those within the administrative system enjoying better social security welfare, and others, like rural workers and employees in private companies having a lower level of social security."
Another expert, Zhong Hongwu, an associate research fellow at the Chinese Academy of Social Sciences, said that government should support the social service system and not let businesses shoulder the burden.
He said, "If the current social security scheme is to be adjusted, the government shouldn't transfer the burden from enterprises to employees. Instead, the government should think of ways to enrich the social security funds itself."
"We can not utterly blame the enterprises for such deeds as a businessman's primary mission is to help his company survive," Zhong added.
