Liaoning governor Bo Xilai said that his province’s pilot scheme for a new social security network is struggling to raise the cash to pay pensions to the 2.7m pensioners in the province. The social security system is made up of pension funds, medical and unemployment insurance and public provident funds for housing. Workers at stateowned enterprises are required to pay 20 per cent of their salaries to cover contributions. However, only 5m of the nearly 7m eligible workers in Liaoning paid all their contributions last year.
In addition, many of the province’s half million workers made unemployed last year have not received the Yn10,000 compensation to which they were entitled from their former employers. One bicycle factory gave workers bicycles to offset the amount due.