China’s Premier Calls for Stronger Social Security Coverage as Demographic Pressures Grow

China's Premier Calls for Stronger Social Security Coverage as Demographic Pressures Grow

Chinese Premier Li Qiang has called for further reforms to the country's social security system, highlighting the need to improve pension coverage, strengthen protection for flexible workers and develop additional sources of support as demographic changes place increasing pressure on public welfare programmes.

Li made the remarks on Thursday while presiding over a State Council study session on improving China's multi-tiered social security system. The comments were reported by Chinese state media on Friday.

The proposed reforms reflect a broader challenge facing China: how to maintain an extensive social safety net while the population ages, the workforce changes and employment patterns become increasingly diverse.

According to Xinhua, Li called for a system covering the entire population in both urban and rural areas, with an emphasis on fairness, unified standards, effective regulation and long-term sustainability.

He said China had basically established the world's largest and fully functional social security system, but changes in population structure, technological development and new forms of employment had created additional demands.

Among the priorities identified by the premier were expanding enterprise annuity coverage, making personal pension programmes more attractive, supporting commercial health insurance and steadily advancing long-term care insurance.

Li also stressed the need to improve social security arrangements for people in flexible employment and new forms of work. This group includes workers whose employment arrangements may differ from traditional full-time jobs, such as some platform-based workers and independent contractors.

The issue has become increasingly important as China's labour market evolves. Traditional social insurance systems were largely designed around formal employment relationships, while newer forms of work can make contributions and benefit coverage more complicated.

Li called for clearer responsibilities among government authorities, employers, individuals and society. The aim, according to the official account, is to establish a more sustainable system in which different parties share responsibility for social protection.

The government also plans to strengthen pension protection for urban and rural residents, improve unemployment insurance and refine social assistance programmes. Li said supervision of social security funds should be strengthened to protect their value and ensure that they are managed effectively.

The policy discussion comes amid wider concerns about the long-term financing of China's pension system.

In a report published on Friday, the South China Morning Post cited warnings from former banking regulator Guo Shuqing that the pension system could face funding pressure over the next two decades.

Guo has reportedly called for additional fiscal resources and greater transfers of state-owned capital to social security funds. He also argued that existing government spending priorities could be reviewed to provide more support for pension programmes.

The debate is particularly relevant because China's population is ageing. According to figures cited by the SCMP, people aged 60 and above accounted for 23% of the population at the end of last year, while the country's total population declined by 3.39 million year on year.

China operates separate basic pension arrangements for employees and for urban and rural residents not covered by the employee scheme. The latter generally provides lower benefits and relies heavily on government subsidies.

Expanding coverage and improving benefit levels could therefore require more than administrative adjustments. Policymakers will need to consider contribution rates, government subsidies, fiscal capacity and the distribution of responsibilities among employers and individuals.

The development of supplementary pensions and commercial health insurance could provide additional sources of support, but access and affordability will remain important considerations.

For businesses, changes to social security policy may affect labour costs, employee benefits and hiring arrangements. For workers, particularly those in flexible employment, improved access could help reduce uncertainty and strengthen protection against unemployment, illness and old age.

Li's remarks outline policy priorities rather than a detailed timetable for implementation. The next important questions will concern the specific measures, funding arrangements and regulatory changes that the government introduces.