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Social security funds need better management

(Xinhua)
Updated: 2007-03-02 15:04

Chinese political advisors are appealing for better management of social security and housing funds in the run-up to the annual session of the Chinese People's Political Consultative Conference (CPPCC) National Committee, which will start on March 3.

CPPCC National Committee member Hao Ruyu said the social security fund should be better managed and used as it is closely related to people's livelihood.

China's social security system is funded from revenues from huge, multi-billion yuan insurance funds that provide pensions, unemployment and medical insurance, worker injury compensation, and maternity leave.

Hao, vice president of the Capital University of Economics and Business based in Beijing, suggested the country expand the reform that replaces social security agencies with local taxation departments to raise social security funds.

Currently, the reform is trialed in 20 provinces and municipalities. Hao said it should be expanded to the whole country.

The social security tax system, currently used in more than 132 countries, can be another alternative for China to better its social security funds management.

An earlier meeting on clean government held by the State Council, the country's central government, has called governmental audit agencies to strengthen the supervision of social security funds and publicly accumulated housing funds.

China's National Audit Office discovered 7.1 billion yuan (916 million U.S. dollars) in illegally used social security funds in 2006. The funds were either illegally borrowed, used or deposited.

There are also frequent reports of large amounts of publicly accumulated housing funds misappropriated in China.

CPPCC National Committee member Yao Shouzhuo, a professor at Hunan University, said the management of housing funds should be supervised through multiple channels.