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The transitioning population: systems and costs

March 25, 2014

konjaku: beginning a look at how the net costs to transform the rural population into urban residents is conceived of, and estimated.

State Council research member: the net cost to transform the agricultural population into urban residents is not unreachable

http://society.people.com.cn/n/2013/1201/c1008-23705056.html
2013-12-01

the urban residency umbrella

the urban residency umbrella

permanent residency

permanent residency

A home for the new urban resident

A home for the new urban resident

(photo and cartoons source:http://news.yesky.com/hot/401/36528901.shtml)

–Old age insurance subsidies are long term, payments for these take up close to one half of the necessary expenditure, this is the greatest pressure
–the later we wait to set up the fund, the higher costs will be
–Distribution of payments will constantly be readjusted among different levels of government

Reporter: what is involved in the net cost of transitioning the rural population that have become migrant workers in the cities into full urban residents?

Jin Sanlin: The essential point is that they must the same rights and public services.The cost of educating their children, medical treatment insurance, old age insurance, guaranteed housing [involving the construction of public housing at rental rates below market-priced housing], unemployment insurance, social management expenses, etc. — these costs make up the net costs.

Reporter: won’t making up these costs put even more pressure on local governments?

The State Council research center has done a study of Chongqing, Wuhan (in Hubei), Zhengzhou (capital of Henan), and Jiaxing (northern Zhejiang), four cities which are focal points of the problem of transforming the migrant population into urban residents. In the short term, compulsory education and guaranteed housing are the main expenses. In the long term, old age insurance will occupy 40-50% of the net cost.
For local governments, the fund for old age insurance payments is already under-subsidized. The system needs to be improved step-by-step, The costs to bring the migrant population up to urban resident status will add a further deficit because the migrant population is a comparatively low-income group, which means they will pay in less and get back proportionally larger payments.

Reporter: the third plenary session of the CPC 18th Central Committee “Resolution” proposed a system for handling payments to the transitioning population as it urbanizes. How do you think the net cost will be divided up?

Jin Sanlin: First we need to clarify what are the responsibilities of the different levels of government. The central government is responsible for establishing the minimum criterion for basic public services for the whole country, and it assumes responsibility for the basic net cost. For the trans-provincial transitioning population, it adds on subsidies to the provincial level governments. In turn, the provincial government establishes criteria for public service within the province, and assumes responsibility for the basic net cost. For the population transitioning from one city to another, it adds subsidies to help individual city governments. The city governments are also responsible for the basic net cost for public service on the city level, including infrastructure and transportation.
Going forward we must perfect the taxation system, and readjust the system of financial allotments among the various levels of government, taking the population of permanent residents as the basic unit of taxation. We need to strengthen the special fund for the transitioning population, on the level of both the central and provisional governments, to provide subsidies to the many cities taking in this population. We must establish a financial system that brings together and strengthens property ownership coupled with the attendant rights and responsibilities. We must ensure that on a grassroots level local governments are provided with resources for public services and regular allocations of funds, in order for them to have the ability to follow the distribution of the population in the areas of their jurisdiction.

 

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