The central government will establish a nationwide basic social security system by June that will for the first time cover historically neglected rural areas, an official of the Ministry of Civil Affairs said Thursday.

At present, provinces, municipalities and autonomous regions operate their own systems. The central government has in the past provided funds only to urban areas.

Sun Yang, an official of the ministry's department of subsistence security, said a subsidy scheme and nationwide regulation on basic social security coverage would be unveiled after the annual session of the National People's Congress in March.

She did not say how much money the central government would spend on the system.

However, she did say the central government would give different subsidies to different areas, with western areas receiving more.

In addition to the funds from the central government, local governments will also be required to allocate funds not necessarily at the level provided by the central government to support the system, she said.

She said that under the current system, a farmer who qualified for the system received an average of about 33.2 yuan (US$4.25) per month. This figure could grow once the central government starts injecting money into the system.

The nationwide system will help redress the absence of any sort of social security system in six provinces and autonomous regions Hubei, Yunnan, Guizhou, Ningxia, Xinjiang and Tibet she said.

Sun said different parts of the country would be allowed to set their own standards for those who qualify for the system.

For example, in North China's Inner Mongolia Autonomous Region, farmers who earn less than 625 yuan (US$80) a year and herdsmen who earn less than 825 yuan (US$106) on average are entitled to minimum social security.

By contrast, East China's Fujian Province draws the line at 1,000 yuan (US$128).

Li Liguo, vice-minister of Civil Affairs, said at a conference last Thursday that about 3.5 percent of the nation's rural population would qualify for the system.

Li Shaoguang, a professor at Renmin University of China's Institute of Social Security, said guaranteeing that the system operated properly would be a challenge.

"More transparency and democracy are needed to ensure the money is properly managed and actually ends up in the hands of poor farmers," Li said.

"We should draw lessons from the major corruption cases involving misappropriated funds from urban social security funds last year."

Li also urged the government to increase incomes and other benefits for migrant workers, saying many rural families depend on the money such workers send back from cities.

Yang Tuan, a researcher at the Chinese Academy of Social Sciences' Social Policy Research Center, said the establishment of a nationwide basic social security system was a reflection of the progress the government has made in drawing up social policies.

(China Daily January 26, 2007)