Minister of Civil Affairs Li Xueju urged local civil affairs departments to keep a close watch on the impact of price fluctuations on the lives of registered recipients for the minimum living allowance.

The minimum living subsidy program, a new system differing from the traditional social welfare measures in the old planned economy era, was first launched in Shanghai in 1993 to help needy urban people on a regular basis with fixed assistance funds.

It swept across urban areas during the late 1990s, when large numbers of workers were laid off from state-owned enterprises.

Over 22.4 million urban residents were registered as recipients of the minimum living allowance last year. The payments of subsidies across China totaled 15.1 billion yuan (US$1.8 billion).

The ministry has now told local civil affairs departments to raise allowances in accordance with local economic development, price jumps and changes in consumption levels to ensure that basic living standards for poor urban residents do not fall.

An urgent notice issued by the General Office of the State Council earlier this month on food supply also instructed local governments to adjust as necessary the standard of the urban minimum living subsidy.

The ministry asked local departments to form a flexible standard of minimum living subsidy, so that state funds go to people who really need help.

The poorest citizens or laid-off workers and their relatives constitute the majority of urban recipients. Most of them are in northeast, central and west China, the old industrial and mining bases.

The number of recipients exceeded 1 million in each of the provinces, according to a report from the ministry.

Criteria for the minimum living allowance vary from region to region in line with local economic development. For example, childless and elderly subjects can receive annual per capita allowances of 1,000 yuan (US$120) in Guangdong, one of the wealthiest provinces. The figure becomes 240 yuan (US$29) to 600 yuan (US$72) further inland, with lower figures more prevalent in the western region.

The ministry requires local departments to link the allowance mechanism with other social security mechanisms and reemployment efforts.

It also calls on local officials to streamline management and enhance supervision of subsidy allocations, with strict procedures in place at every step from application to investigation and approval and the final provision of allowances.

(China Daily March 26, 2004)