The Causes and Impacts of the Controversy Over the Chinese Government's Requirement for Mandatory Social Insurance Contributions, and How It Reveals China's Structural Injustice and the Vulnerability of Its Lower and Lower-Middle Classes (Part 2)

[u/Slow-Property5895]

(Continued from Part One)

The Real Motive Behind the Authorities' Mandatory Social Insurance Contribution Policy: Financial Strains on Social Insurance Funds, Rising Expenditures, and Declining Revenues
ㅤ
The Chinese authorities' stated reason for requiring workers to contribute to social insurance is to regulate employment practices and protect workers' rights and interests. In reality, however, the policy is an attempt to expand the sources of social insurance reserves in response to increasingly strained funds and the growing prospect of financial shortfalls.
ㅤ
In recent years, social insurance funds, particularly the funding pools for medical and pension insurance, have come under increasing financial pressure. Some regions, such as Northeast China and western China, already face expenditures exceeding revenues and require fiscal transfers from the southeastern coastal regions and other areas. In 2024, expenditures from China's national medical insurance fund increased by 5.5%, while revenues grew by only 4.4%. As population aging intensifies, the number of people contributing to social insurance is declining while the number receiving benefits is increasing, making future shortfalls increasingly severe. Official projections indicate that the annual pension fund balance will turn negative in 2028 and that accumulated pension reserves will be exhausted by 2035.
ㅤ
Misuse of Social Insurance Funds and the Lack of Oversight
ㅤ
Apart from the effects of population aging and other social developments, social insurance funds have also been embezzled, misappropriated, and misused by local governments and relevant institutions. According to official reports from China's National Audit Office (国家审计署), some local governments have diverted social insurance funds to purposes unrelated to social insurance, including emergency public welfare expenditures, debt repayment, and infrastructure construction. Such practices have further aggravated the financial strain on social insurance funds. Although some of these expenditures may also serve legitimate public welfare purposes, "robbing Peter to pay Paul" inevitably undermines the reliability of social insurance payments. Using these funds to repay debts or finance infrastructure projects deviates even further from the purpose of social insurance: the government is using the people's money to repay its own debts and enhance its political achievements.
ㅤ
The storage and use of social insurance funds are also opaque to the public. Citizens cannot monitor where the social insurance contributions they pay actually go, and they cannot even clearly ascertain the true figures concerning the national social insurance funding pool. This lack of transparency itself increases the risks of corruption and misappropriation. Naturally, the public becomes even more concerned that the benefits promised in exchange for their contributions may never materialize, and that the money they worked so hard to earn and pay into the system will simply go down the drain.
ㅤ
Severe Inequality and Unfairness in Social Insurance Benefits: "Negative Welfare" and "Robbing the Poor to Enrich the Rich"
ㅤ
The most serious problem, however, remains the inequality and injustice in the distribution of social insurance benefits. China's social insurance policies are significantly tilted toward elites within the system who hold power and determine policy, while disadvantaging ordinary people who lack power and influence. As mentioned earlier, government officials and employees of state-owned enterprises and public institutions enjoy the highest levels of medical, pension, work-related injury, and other forms of protection. By contrast, the social insurance benefits available to employees of non-state-owned enterprises, especially small and medium-sized businesses, are often only 20%–50% of those enjoyed by the former group. Ordinary urban and rural residents, including self-employed individuals, receive even more meager benefits. Yet the funds supporting these benefits come from social insurance contributions and taxes paid by the entire population.
ㅤ
This means that government officials whose social insurance contribution periods are "deemed to have been paid" receive pensions and medical insurance benefits financed by ordinary citizens who have actually paid social insurance contributions. Although many employees of government agencies, state-owned enterprises, and public institutions have indeed paid relatively high social insurance contributions, the pensions, medical reimbursements, work-related injury subsidies, and other benefits they ultimately receive are still significantly greater than those received by employees of non-state-owned enterprises and ordinary urban and rural residents.
ㅤ
Such a system of social insurance contributions and distribution can be described as a form of "negative welfare" that "robs the poor to enrich the rich." A normal social security system generally favors the poor and vulnerable: the poorer a person is, the lower the cost of obtaining medical and pension protection and the greater the relative benefits received. Wealthier people, meanwhile, are expected to bear relatively higher costs. This is also the original purpose of a normal social security system: to narrow the gap between rich and poor and promote social justice through collective participation in insurance by citizens.
ㅤ
In China, however, the longstanding reality has been that the more power, wealth, and status people possess, the more social protection they can enjoy from the state. Moreover, they often need to contribute very little in advance, or may even have their contribution obligations effectively written off through arrangements such as "deemed contributions." Conversely, the less power ordinary people in the lower and middle-lower classes possess, the more they must pay in various social insurance contributions and taxes in exchange for meager protection.
ㅤ
Even during the eras of Mao Zedong (毛泽东) and Deng Xiaoping (邓小平), farmers and other vulnerable groups were required to pay agricultural taxes and other levies while receiving virtually no effective institutional protection in medical care, pensions, or other areas. Although the Mao era had a cooperative medical system centered on "barefoot doctors" (赤脚医生), it was extremely rudimentary and of poor quality, and could not treat most serious illnesses. Meanwhile, government officials enjoyed publicly funded medical care, which was often entirely or largely free for the individual. The free portion was financed by the state, government institutions, or state-owned enterprises, with the funds ultimately coming from all workers and taxpayers.
ㅤ
Since the beginning of the 21st century, China's social security system has gradually shifted from what was once entirely "negative welfare" toward "zero welfare" and "positive welfare." In other words, ordinary people and vulnerable groups have begun to receive some social protection, bringing the system somewhat closer to those of normal countries. In particular, farmers at the bottom of society have gained access to modest basic pensions and medical insurance protection against major illnesses, benefits they had never previously enjoyed.
ㅤ
Nevertheless, viewed in terms of the social insurance system and its distribution mechanisms as a whole, China can still be described as a "negative welfare" state. This is because powerful and privileged groups, government officials, and elites within the system continue to receive excellent social welfare protection at relatively low costs—paying relatively little in taxes and social insurance contributions compared with their incomes—while enjoying high salaries, substantial pensions, and generous medical reimbursement. Meanwhile, ordinary people in the lower and middle-lower classes outside the system must still bear costs that are relatively high in relation to their financial circumstances merely to obtain welfare protection sufficient to maintain a basic standard of living. Moreover, if they experience a major crisis, such as a serious illness, bankruptcy, or an accident, their basic welfare protection is far from sufficient to help them overcome the difficulties. Such crises may also prevent them from continuing to contribute to or receive social insurance benefits, trapping them in a vicious cycle.
ㅤ
The differences between the social insurance contributions and benefits of privileged officials and bureaucrats within the system and ordinary people outside it can be illustrated numerically. Suppose someone within the system contributes 1,000 yuan and receives 10,000 yuan in benefits, while someone outside the system contributes 500 yuan and receives 2,000 yuan. Although the person within the system contributes more, both the rate of return and the total amount of benefits are clearly higher than those received by the person outside it. Moreover, for people outside the system who lack protection and a sense of security and face financial difficulties, that 500 yuan is often more important than 1,000 yuan is to those within the system. People within the system can easily afford to contribute 1,000 yuan to social insurance, while those outside it must think carefully and cut back on expenses even to contribute 500 yuan.
ㅤ
China's Economic Downturn and Government Fiscal Strains: The Social Insurance System Faces a Greater Crisis and the Risk of Financial Collapse
ㅤ
In the longer term, there is a substantial possibility that China's social insurance system, particularly medical and pension insurance, will experience a financial collapse. A national social insurance system may appear authoritative and reliable, but in essence it shares fundamental similarities with commercial insurance, corporate investment, and even pyramid schemes: all require a continuous inflow of new participants or funds, with revenues exceeding financial shortfalls, in order to sustain operations resembling a game of "passing the parcel." The difference between national social insurance and commercial activities is that the state has fiscal resources to serve as a backstop, cover shortfalls, and provide guarantees. However, the healthy functioning of a national social insurance system depends on a growing economy, a relatively young population, abundant fiscal resources, and political stability. Under such conditions, national social insurance funds can maintain surpluses, or at least balance revenues and expenditures, and afford the enormous costs of medical care, pensions, and other benefits for the population.
ㅤ
China's current situation, however, is characterized by an increasingly sluggish economy, severe population aging, a low birth rate, fiscal constraints, and risks and pressures across all sectors of society. Under these circumstances, it is difficult to expect sufficient funds to be available in the future to guarantee normal social insurance expenditures. In fact, in recent years, reports have already emerged from various institutions in some less-developed regions of their inability to pay salaries, pensions, and medical insurance reimbursements normally. Such incidents have so far remained relatively scattered and isolated. However, as economic conditions continue to deteriorate and fiscal pressures intensify, a nationwide financial collapse of the system may well occur. During the COVID-19 pandemic from 2020 to 2022, not only was the economy severely affected, but enormous amounts of medical insurance funds were also spent on nucleic acid testing, the construction of makeshift hospitals, and other measures, resulting in massive waste. The tightening of medical insurance reimbursement in subsequent years, and the inability of many people to obtain normal reimbursement, are among the lingering consequences of this misuse of medical insurance funds.
ㅤ
It is against this background that the authorities introduced the "new policy" of mandatory medical insurance contributions, presented in the form of a judicial interpretation and under the banner of "protecting workers' rights and interests." If the economy were flourishing and the future could confidently be expected to improve, standardizing the social security system could indeed be a beneficial measure. Under present circumstances, however, it merely imposes a heavier financial burden on ordinary Chinese people, especially workers in the lower and middle-lower classes. Moreover, it is difficult to be optimistic about whether pension and other social insurance benefits will actually be paid as promised in the future.
ㅤ
Furthermore, judging from the Chinese authorities' previous conduct on various issues, such as the family planning policy and the policy of common prosperity, they have repeatedly made attractive and solemn promises only to break them later. For example, when promoting the family planning policy, the government claimed that it would assume responsibility for supporting the elderly parents of only children, as reflected in the slogan, "Having just one child is good; the government will provide for you in old age" (只生一个好，政府来养老). Yet when the parents of the only-child generation reached old age, the message changed to "You cannot rely on the government for old-age support" (养老不能靠政府). During the period of reform and opening up, Deng Xiaoping also advocated that "those who become rich first should help others become rich later" (先富带后富) and promoted "common prosperity" (共同富裕). He also stated, "If reform leads to polarization between rich and poor, it will have failed." Today, however, the wealth gap, class rigidity, and privileges enjoyed by powerful elites have become increasingly severe. These precedents make it difficult for Chinese people to place confidence in the rosy promises made by the authorities concerning social insurance policies. Instead, they are filled with skepticism about whether those promises will be honored.
ㅤ
Mandatory Social Insurance Contributions Enrich Privileged Elites Within the System While Increasing the Burden on Ordinary People: Benefiting Officials Rather Than Citizens, and the Rich Rather Than the Poor
ㅤ
Regardless of whether individuals will eventually receive the pensions and medical insurance reimbursements to which they are entitled, one thing is certain: a large portion of the social insurance contributions being paid today will be used to finance the pensions of current retirees and the medical expenses of those who are ill. Among the principal beneficiaries are privileged elites and leading officials within the system who receive substantial pensions and full medical reimbursement, as well as many mid-ranking civil servants and state-owned enterprise employees who occupy their positions without performing meaningful work. In exchange for relatively small social insurance contributions, they receive generous benefits, enjoying enormous returns on minimal investment and virtually guaranteed security regardless of circumstances.
ㅤ
The distribution of social insurance benefits operates through multiple parallel systems, while the sources of social insurance funding are pooled together. This means that much of the money paid by ordinary citizens is used to support the privileged. At a time when ordinary Chinese people already have meager incomes, forcing them to contribute to social insurance in order to support privileged elites within the system is clearly a case of "robbing the poor to enrich the rich."
ㅤ
Moreover, as the number of retirees continues to increase and the labor force continues to shrink, each ordinary worker will have to support an increasing number of privileged beneficiaries within the system, placing an ever-heavier burden on workers. Some workers become ill from years of overwork and may still be unable to afford treatment even if half of their medical expenses are reimbursed. If they die before reaching the age of 60, their expected pension benefits will be lost. Even if they live beyond 60, there is no guarantee of how long they will be able to collect their pensions. Although their family members can indeed withdraw the remaining balance in their social insurance accounts, inflation means that the money withdrawn will have lost purchasing power compared with the same nominal amount when it was originally contributed. Moreover, individuals may not necessarily wish to leave this money to their families, and some may have no heirs at all.
ㅤ
Mandatory social insurance contributions also mean that enterprises must pay approximately twice as much as their employees in social insurance contributions. In today's already intensely competitive environment of "involution" (内卷), businesses seeking to maintain their profits—or even merely reduce their losses—have little choice but to shift their share of social insurance costs onto employees, either by reducing wages or by increasing working hours and labor intensity. Both business owners and employees face greater pressure and must work harder and endure more exhaustion simply to maintain their previous levels of income. The business environment will inevitably deteriorate further, with increasingly intense involution, unfair competition, and bankruptcies.
ㅤ
It is true that most countries around the world, particularly most developed countries, have mandatory social insurance contribution policies. In countries such as Germany, France, Japan, South Korea, and Canada, workers and enterprises are required to contribute to social insurance, with total contributions reaching 40% of wages or even more. However, these countries are able to distribute social insurance benefits fairly among their citizens, give relatively greater consideration to vulnerable groups, and ensure that benefits are paid in a timely manner. The collection, expenditure, and financial condition of social insurance funds are also subject to public oversight. Under democratic systems, adjustments to social insurance policies are determined by the will of the majority. China's situation is entirely different from that of these countries.
ㅤ
Clearly, the Chinese authorities' policy of mandatory social insurance contributions is detrimental to most workers, business owners, and the business environment, while benefiting those within the system who enjoy generous social protection and receive substantial pensions. It is therefore hardly surprising that the policy has provoked a public backlash, that people are unwilling to be forced to contribute to social insurance, and that some have even chosen to "stand on the same side as the capitalists (business owners)."
ㅤ
The Roots of the Social Insurance Controversy Lie in Unfair Distribution, Stagnant Reform, and the Absence of Democracy: Distribution Is Controlled by Vested Interests, While Ordinary People Are Left as Lambs to the Slaughter
ㅤ
The core problems underlying the current controversy over mandatory social insurance contributions, as well as the broader social insurance system, are unfair distribution, the meager incomes of the lower and middle-lower classes, and the hardships they face in everyday life. Since the beginning of reform and opening up, China's economy has developed at an extraordinary pace, and the country has indeed "become wealthier." However, the gap between rich and poor has also continued to widen. Although people in the lower and middle-lower classes have largely overcome the problems of hunger and basic subsistence, their incomes remain meager. They can barely sustain their daily lives, while the burdens they face remain heavy. Most Chinese people are still far from materially affluent, and their lives lack a sense of security. They remain in a vulnerable position, unable to withstand substantial risks and pressures. Social insurance was originally intended to narrow the wealth gap, guarantee ordinary people's basic livelihoods, and strengthen their sense of security. In China, however, it has become a means for the government to extract wealth from the people and lavish resources on officials and the privileged, imposing additional burdens on ordinary citizens. People's dissatisfaction with mandatory social insurance contributions is therefore another eruption of anger over deeper structural injustices in society.
ㅤ
Although the Chinese authorities repeatedly emphasize the need to reform the distribution system in official propaganda and textbooks, using expressions such as "increasing the share of household income in national income and the share of labor remuneration in primary distribution," "placing greater emphasis on fairness in redistribution," and "addressing the problems of inadequate and uneven development and national income," these objectives have not been translated into reality. There is a profound gulf between the rhetoric of official propaganda and the realities of society.
ㅤ
To resolve the social insurance controversy and truly transform social insurance into a beneficial instrument for promoting fairness and protecting people's livelihoods, China must reform its distribution mechanisms. Fairness must be emphasized in both primary distribution and redistribution, the incomes of people in the lower and middle-lower classes must be increased, and the hierarchical and multi-track systems of welfare protection must gradually be abolished. Corruption within the distribution system and the operation of social insurance must also be combated. Social insurance funds must genuinely be "collected from the people and used for the people" (取之于民，用之于民), with a high degree of transparency and public oversight. Of course, the most important thing is for all these measures to be implemented in practice rather than remaining merely slogans in propaganda and textbooks.
ㅤ
What makes the situation pessimistic, however, is that China's political and institutional system has become increasingly conservative in recent years, reforms to the distribution system have stagnated, and class rigidity has grown ever more severe. Meanwhile, the absence of political reform and the people's inability to exercise power have fundamentally blocked the possibility of various beneficial reforms. Power is accountable only to the source from which it derives. In China, power is concentrated in the hands of a small minority of vested interests, who naturally refuse to relinquish their privileges and benefits, including their high incomes and generous social protection. If China cannot achieve democratization and ordinary people cannot participate in "dividing the cake," then they can only become the "cakes" on the menu, ordered and devoured by the powerful and privileged figures and their followers gathered around the dining table. Before fundamental institutional change takes place, the various hardships affecting people's livelihoods, including the social insurance controversy, are unlikely to be properly resolved.

(Due to character limits, the article has to be published in two parts. This is the second part.)

(This article was written by Wang Qingmin (王庆民), a Chinese writer and international political affairs researcher based in Europe. The original text is in Chinese.)

[u/AutoModerator]

NOTICE: See below for a copy of the original post by Slow-Property5895 in case it is edited or deleted.

(Continued from Part One)

The Real Motive Behind the Authorities' Mandatory Social Insurance Contribution Policy: Financial Strains on Social Insurance Funds, Rising Expenditures, and Declining Revenues
ㅤ
The Chinese authorities' stated reason for requiring workers to contribute to social insurance is to regulate employment practices and protect workers' rights and interests. In reality, however, the policy is an attempt to expand the sources of social insurance reserves in response to increasingly strained funds and the growing prospect of financial shortfalls.
ㅤ
In recent years, social insurance funds, particularly the funding pools for medical and pension insurance, have come under increasing financial pressure. Some regions, such as Northeast China and western China, already face expenditures exceeding revenues and require fiscal transfers from the southeastern coastal regions and other areas. In 2024, expenditures from China's national medical insurance fund increased by 5.5%, while revenues grew by only 4.4%. As population aging intensifies, the number of people contributing to social insurance is declining while the number receiving benefits is increasing, making future shortfalls increasingly severe. Official projections indicate that the annual pension fund balance will turn negative in 2028 and that accumulated pension reserves will be exhausted by 2035.
ㅤ
Misuse of Social Insurance Funds and the Lack of Oversight
ㅤ
Apart from the effects of population aging and other social developments, social insurance funds have also been embezzled, misappropriated, and misused by local governments and relevant institutions. According to official reports from China's National Audit Office (国家审计署), some local governments have diverted social insurance funds to purposes unrelated to social insurance, including emergency public welfare expenditures, debt repayment, and infrastructure construction. Such practices have further aggravated the financial strain on social insurance funds. Although some of these expenditures may also serve legitimate public welfare purposes, "robbing Peter to pay Paul" inevitably undermines the reliability of social insurance payments. Using these funds to repay debts or finance infrastructure projects deviates even further from the purpose of social insurance: the government is using the people's money to repay its own debts and enhance its political achievements.
ㅤ
The storage and use of social insurance funds are also opaque to the public. Citizens cannot monitor where the social insurance contributions they pay actually go, and they cannot even clearly ascertain the true figures concerning the national social insurance funding pool. This lack of transparency itself increases the risks of corruption and misappropriation. Naturally, the public becomes even more concerned that the benefits promised in exchange for their contributions may never materialize, and that the money they worked so hard to earn and pay into the system will simply go down the drain.
ㅤ
Severe Inequality and Unfairness in Social Insurance Benefits: "Negative Welfare" and "Robbing the Poor to Enrich the Rich"
ㅤ
The most serious problem, however, remains the inequality and injustice in the distribution of social insurance benefits. China's social insurance policies are significantly tilted toward elites within the system who hold power and determine policy, while disadvantaging ordinary people who lack power and influence. As mentioned earlier, government officials and employees of state-owned enterprises and public institutions enjoy the highest levels of medical, pension, work-related injury, and other forms of protection. By contrast, the social insurance benefits available to employees of non-state-owned enterprises, especially small and medium-sized businesses, are often only 20%–50% of those enjoyed by the former group. Ordinary urban and rural residents, including self-employed individuals, receive even more meager benefits. Yet the funds supporting these benefits come from social insurance contributions and taxes paid by the entire population.
ㅤ
This means that government officials whose social insurance contribution periods are "deemed to have been paid" receive pensions and medical insurance benefits financed by ordinary citizens who have actually paid social insurance contributions. Although many employees of government agencies, state-owned enterprises, and public institutions have indeed paid relatively high social insurance contributions, the pensions, medical reimbursements, work-related injury subsidies, and other benefits they ultimately receive are still significantly greater than those received by employees of non-state-owned enterprises and ordinary urban and rural residents.
ㅤ
Such a system of social insurance contributions and distribution can be described as a form of "negative welfare" that "robs the poor to enrich the rich." A normal social security system generally favors the poor and vulnerable: the poorer a person is, the lower the cost of obtaining medical and pension protection and the greater the relative benefits received. Wealthier people, meanwhile, are expected to bear relatively higher costs. This is also the original purpose of a normal social security system: to narrow the gap between rich and poor and promote social justice through collective participation in insurance by citizens.
ㅤ
In China, however, the longstanding reality has been that the more power, wealth, and status people possess, the more social protection they can enjoy from the state. Moreover, they often need to contribute very little in advance, or may even have their contribution obligations effectively written off through arrangements such as "deemed contributions." Conversely, the less power ordinary people in the lower and middle-lower classes possess, the more they must pay in various social insurance contributions and taxes in exchange for meager protection.
ㅤ
Even during the eras of Mao Zedong (毛泽东) and Deng Xiaoping (邓小平), farmers and other vulnerable groups were required to pay agricultural taxes and other levies while receiving virtually no effective institutional protection in medical care, pensions, or other areas. Although the Mao era had a cooperative medical system centered on "barefoot doctors" (赤脚医生), it was extremely rudimentary and of poor quality, and could not treat most serious illnesses. Meanwhile, government officials enjoyed publicly funded medical care, which was often entirely or largely free for the individual. The free portion was financed by the state, government institutions, or state-owned enterprises, with the funds ultimately coming from all workers and taxpayers.
ㅤ
Since the beginning of the 21st century, China's social security system has gradually shifted from what was once entirely "negative welfare" toward "zero welfare" and "positive welfare." In other words, ordinary people and vulnerable groups have begun to receive some social protection, bringing the system somewhat closer to those of normal countries. In particular, farmers at the bottom of society have gained access to modest basic pensions and medical insurance protection against major illnesses, benefits they had never previously enjoyed.
ㅤ
Nevertheless, viewed in terms of the social insurance system and its distribution mechanisms as a whole, China can still be described as a "negative welfare" state. This is because powerful and privileged groups, government officials, and elites within the system continue to receive excellent social welfare protection at relatively low costs—paying relatively little in taxes and social insurance contributions compared with their incomes—while enjoying high salaries, substantial pensions, and generous medical reimbursement. Meanwhile, ordinary people in the lower and middle-lower classes outside the system must still bear costs that are relatively high in relation to their financial circumstances merely to obtain welfare protection sufficient to maintain a basic standard of living. Moreover, if they experience a major crisis, such as a serious illness, bankruptcy, or an accident, their basic welfare protection is far from sufficient to help them overcome the difficulties. Such crises may also prevent them from continuing to contribute to or receive social insurance benefits, trapping them in a vicious cycle.
ㅤ
The differences between the social insurance contributions and benefits of privileged officials and bureaucrats within the system and ordinary people outside it can be illustrated numerically. Suppose someone within the system contributes 1,000 yuan and receives 10,000 yuan in benefits, while someone outside the system contributes 500 yuan and receives 2,000 yuan. Although the person within the system contributes more, both the rate of return and the total amount of benefits are clearly higher than those received by the person outside it. Moreover, for people outside the system who lack protection and a sense of security and face financial difficulties, that 500 yuan is often more important than 1,000 yuan is to those within the system. People within the system can easily afford to contribute 1,000 yuan to social insurance, while those outside it must think carefully and cut back on expenses even to contribute 500 yuan.
ㅤ
China's Economic Downturn and Government Fiscal Strains: The Social Insurance System Faces a Greater Crisis and the Risk of Financial Collapse
ㅤ
In the longer term, there is a substantial possibility that China's social insurance system, particularly medical and pension insurance, will experience a financial collapse. A national social insurance system may appear authoritative and reliable, but in essence it shares fundamental similarities with commercial insurance, corporate investment,

[u/godfather-ww → u/AutoModerator]

AI created TLDR:

## TLDR

This is an opinion piece by Wang Qingmin, a Europe-based writer. It argues that China's new mandatory social insurance rule hurts ordinary workers and favors elites inside the system. The claims are the author's, not verified facts.

**Trigger:** A Supreme People's Court interpretation took effect on September 1. It voids any labor contract that waives social insurance contributions. Until now, enforcement was lax and "no complaint, no intervention."

**Unequal benefits (author's examples):**

• Yingtan, Jiangxi, January 2023: average monthly pension of about 5,080 yuan for civil servants and public-institution retirees, 2,368 yuan for enterprise retirees, and 207 yuan for urban and rural residents. Farmers who never contributed get about 123 yuan.
  
• Officials get near-100% medical reimbursement. Ordinary people get a nominal ~60%, and in practice pay most costs themselves.
  
• "Deemed contribution" credits officials and state-sector staff with contribution years they never paid.

**Burden on ordinary workers:**

• Employees pay about 10% of wages (8% pension, 2% medical, 0.5% unemployment).
  
• Employers pay about 20%, which the author says is ultimately passed on through lower wages.
  
• Housing fund contributions add 5–12%.
  
• A pension needs at least 15 years of contributions, which is hard for workers with unstable jobs.

**Alleged real motive: fund shortfalls**

• In 2024, medical fund spending rose 5.5% against 4.4% revenue growth.
  
• Official projections put the annual pension balance negative in 2028 and accumulated reserves exhausted by 2035.
  
• The author also cites diversion of funds by local governments, reported by the National Audit Office, and a lack of transparency.

**Conclusion:** The author calls the system "negative welfare" that robs the poor to enrich the rich. He says Germany, Japan and others also mandate contributions, but run fairer, more transparent systems with public oversight. He sees no real fix without distribution reform and political change, and he is pessimistic about that.

**Caveat:** The tone is strongly polemical. The fund projections and Yingtan figures are the ones worth checking against primary sources. The prediction of system "collapse" is speculation.

[u/Slow-Property5895 → u/[deleted]]

What I posted earlier was the first part, and this is the second part. They are not repetitive; rather, they complement each other.

[u/Slow-Property5895]

Link to the first part of the article

https://www.reddit.com/r/China/s/PVYSphZEZx

[u/purplepotatocookies]

Given that Reddit users tend to lean liberal, they’ll see your post as supporting Republican talking points.