"The reform is like a train and social security is like the rails which should be paved wherever the train arrives,'' said Chen Haibo, a deputy to the ongoing National People's Congress (NPC) and director of the Labor and Social Security Department of Northeast China's Liaoning Province.

By the end of last year, the province had established insurance for the elderly covering 6.69 million workers and 2.8 million retirees, and medical insurance covering 6.17 million people, according to Chen.

Some 1.5 million urban residents in Liaoning also receive a sustenance allowance to ensure a minimum living standard.

The State Council selected Liaoning in 2001 as a pilot region to establish an urban social security network.

Liaoning is one of China's oldest industrial centers and has the most laid-off workers and retirees nationwide. The pilot scheme aims to assist the country's millions of jobless and elderly to facilitate the restructuring of State sectors.

Although subsidies from the central government are still needed, Liaoning has formed stable and multi-layer finance channels for the social security network, Chen said.

The provincial congress has also enacted several local ordinances to supervise the use of social security funds.

"The focus of our job this year is to integrate the sustenance allowance for laid-off workers into the unemployment insurance scheme, which is a more standard form of security,'' he said.

Premier Zhu Rongji, in his report to the NPC last week, said social security was "of vital importance'' to State company reforms and said the trial scheme in Liaoning had "marked effects.''

Ze Bazu, NPC deputy and director of the Labor and Social Security Department of Southwest China's Sichuan Province, said: "I think Liaoning's experience will soon spread and help social security work nationwide.''

The social security safety nets will not just serve laid-off and retired workers but also benefit people from all walks of life, he said.

In Sichuan, State factory retirees and workers laid-off from State companies began to receive pensions and sustenance allowances respectively since 1998.

So far, some 4.1 million people in the province have unemployment insurance and 1.4 million receive sustenance allowances, according to Ze.

He noted that the central government's subsidy strongly supports local social security networks.

Central government expenditure on social security programs for 2002 came to 136.2 billion yuan (US$16.5 billion), up 38.6 per cent over the previous year, according to Finance Minister Xiang Huaicheng.

In his budget report to the NPC last Thursday, the minister proposed to boost expenditure on social security in 2003, including increasing the basic pension for State company retirees and doubling the sustenance allowance for urban residents living below the poverty line.

However, social security officials maintained that re-employment efforts are also indispensable.

"Finding jobs for the jobless is the most active form of social security,'' said Chen Haibo.

(China Daily March 10, 2003)