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10th NPC & CPPCC, 2007> Exclusive
UPDATED: January 8, 2007 NO.2 JAN.11, 2007
Elder Care
It is time for the government to provide support for millions of senior citizens in the countryside, experts say
By FENG JIANHUA
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Li Zhaokun, a 71-year-old vagrant, turned himself in to the police in Zhongshan City, Guangdong Province on November 9 for committing arson. "I was told that one could be imprisoned for setting the vegetation on a hill ablaze. I will be able to get fed and clothed in prison and don't have to lead a vagrant's life," Li said in explaining his motivation for the crime.

During their investigation the police discovered a shocking fact: Li had just completed a five-year prison term for setting a forest fire. In that case, he had also turned himself in to the police and gave the same reason for starting the fire: a prisoner's life is better than that of an old vagrant.

While Li's experience appears to be an extreme example, it does ring alarm bells over the social problem of supporting China's rural elderly population.

According to a white paper entitled "The Development of China's Undertakings for the Aged" released by the State Council last December, the first of its kind in the country's history, at the end of 2005 there were 144 million people in China over 60 years of age, accounting for 11 percent of the total population. Over 60 percent of the senior population, or 90 million, lives in rural areas. Yuan Xin, a sociology professor at Nankai University, estimates that China's rural senior population is growing at an annual rate of 850,000, and thus will reach 120 million in the next 20 years.

Zhai Yuhe, a representative of the People's Congress of Heilongjiang Province, the provincial legislature, conducted a survey of living conditions of 10,000 rural senior citizens in 2005. The survey report says 45 percent of the senior citizens did not live with their children; 93 percent could not afford a new piece of clothing in a year; 67 percent could not afford medication for minor illnesses, and 85 percent support themselves by farming.

Self-support

Wu Jiayao, 74, has got diabetes for almost a year. Sometimes, he can only stagger along. However, he cannot afford medication from a hospital and has tried various inexpensive herbs from folk medicine practitioners, but these still cost a "fortune" to him. Despite his poor physical condition, Wu still must do farm work to earn a basic livelihood for himself and his wife.

Wu, a farmer in Jiangxi Province, devoted half his life to raising five children-four sons and one daughter. For many years, the children have worked as migrant laborers in cities, seeing their parents once a year.

Since earning a living is equally hard for his children, Wu has rarely asked them for money, although the country has an ancient tradition of "raising a son to prepare for old age." In this poverty-stricken area, the concept of social security is still quite new to farmers like Wu.

Under such circumstances, the elderly couple is used to earning a living through labor. Despite her poor health, Wu's wife takes whatever odd jobs she can find to ease the financial burden on her husband. The work she does most frequently is stringing pearl necklaces, which strains her eyesight. The payment for a full day of this work is 4 to 5 yuan, which cannot even buy a McDonald's hamburger in this country.

"We have to support ourselves," Wu's wife said with a grin. The reason she does not complain is that she lives among elderly people in a similar situation, who have to do backbreaking work to make a living.

Psychological pain accompanies the physical hardships. A survey by the China Research Center on Aging found that 10 percent of elderly rural residents feel unhappy and 35 percent feel lonely.

When the disease first struck, Wu instantly felt the crisis. He summoned his four sons to his bedside and for the first time raised the issue of subsistence allowances. After discussion, Wu's four sons agreed to each give their parents 200 yuan a year. Although the total amount of 800 yuan hardly covers the cost of one hospital visit, Wu did not challenge the decision.

"This money is very little, but life is not easy for my sons either," he sighed.

Wu and his wife dare not think about how long they can struggle. "I can only wait and see. Since my health is poor, I am worried about what I will do when I cannot move around," said Wu.

More work for the government

Against the reality that most of China's countryside has an aging population, about 94 percent of elderly rural residents rely on their children or other family members for their livelihood. However, this traditional model is facing serious challenges with the country's social and economic development.

First of all, due to the implementation of family planning policies in the last three decades, the size of rural families has been shrinking. The majority of rural families have only one or two children, who have to shoulder the burden of supporting the elderly more heavily than ever.

Second, recent years have seen surplus rural laborers flock to the cities for employment, which has created elderly rural "empty nesters," a phenomenon previously confined to the urban population. Since young members of a family stay in the cities throughout the year, relying on the care of their children is only a dream for the majority of rural seniors.

Third, it is often impossible for farmers to prepare for their old age when they are young. Given the low market prices for grain, the cultivation of grain-a major source of income for farmers-can yield very low profits, only enough for farmers to meet their food and clothing expenses. Since the costs of medical care and education have been rising rapidly in China, most farmers cannot spare money to buy insurance.

According to statistics publicized by the China National Committee on Aging at the beginning of 2006, only 55 million farmers had pension insurance, less than 10 percent of the relevant population. Lu Xuejing, a professor at the Capital University of Economics and Business, disclosed to Beijing Review alarming figures for Beijing. Of the 600,000 farmers above 60 years of age in Beijing's 14 suburban counties, only 23,000, or less than 4 percent, have a pension.

China's social pension insurance system, which was created in the early 1990s, mostly covers the urban population. Many experts attribute the lack of a social security network for farmers to the government's shortage of money for investment. They say that the government, while having its hands full with problems in the urban pension insurance schemes, has no extra energy to deal with pension insurance for the rural population.

However, Lu believes such arguments don't hold water.

"The Chinese Government has the financial capacity to provide subsistence for the rural elderly, while the real bottleneck is a change in attitude-whether the government has the determination to do it," said Lu.

Tao Liqun, a senior researcher with the China Research Center on Aging, expressed his anxiety about the lack of subsistence allowances for the rural poor. "This problem must be put on the government's agenda immediately or the situation will only get worse as time goes by," he told Beijing Review.

Exploring solutions

As a matter of fact, at the same time that the government launched the urban pension insurance scheme, some rural areas, especially well-off areas, started to tentatively establish a rural pension insurance system. The government acquiesced in such efforts but refused to provide any subsidies-as is the case with the urban pension system-or policy support.

According to Lu, the pension systems set up in many rural areas are mostly symbolic. She gave an example. One region asked every farmer to pay a monthly premium of 2 yuan to 20 yuan. As most of the local farmers thought the prospects for the pension system were dim, they chose to pay 2 yuan. The result is they can only get a monthly payment of 9 yuan after they are 60 years old, which is the price of a packet of cigarettes.

Meanwhile, the experimentation with pension insurance in different areas could not deepen without clear government policies and regulations. The mismanagement of the insurance fund had led to rampant graft and embezzlement. In the late 1990s, the government began to investigate and crack down on fraud in the pension insurance systems of rural areas, which effectively put an end to the development of such schemes.

The Chinese Government formally encouraged the establishment of pilot projects for rural pension funds in 2004. In some places, local governments injected money into these funds, and there have been some modest successes.

"Being a vegetable farmer for decades, I never expected to get a retirement pension in my wildest dreams," said Ma Julan from Hami City in Xinjiang Uygur Autonomous Region.

She is one of the seven beneficiaries of her village's pension fund, which was started by the president of a local real estate development company, Cui Yong, in May 2006.

Ma's village is located in the suburbs of Hami City. Since the beginning of the 1990s, the expansion of the city has taken away two thirds of the village's farmland. Although the government pays farmers compensation for land expropriation, earning a livelihood remains a concern for farmers who lost their land.

Cui's real estate development company was founded on the business of developing the village's land. The 108 shareholders of the company, including Cui himself, are all farmers in this village. To return part of the profits to the villagers, Cui created a pension foundation and promised to donate 5 percent of the company's annual profits to the foundation. Moreover, Cui also turned over the permanent operating rights of some commercial real estate to the foundation.

Choosing a model

At the beginning of 2006, Guangdong Province, the economic powerhouse in southern China, began on a trial basis to set up a rural pension insurance system for farmers who lost their land to real estate development. Yangxi County is one of the five counties chosen for a pilot program. The program was launched on November 29, 2006, and almost 100 farmers received pensions. The premiums are shouldered by individuals, villages and local governments, and every participant in this insurance program can get a monthly pension of 200 yuan after the age of 60. However, the benefit is too small to provide a satisfactory life for senior citizens.

"We can only take it slowly, and the participation of the government already marks major progress," said Tao with the China Research Center on Aging.

Another new development is that in some rural areas local governments are encouraging commercial insurers to provide pension insurance for farmers.

"China cannot regard commercial insurance as the pillar model of supporting the elderly in the countryside and commercial insurance can only be a complement at most," asserted Lu. She explained that all commercial insurance schemes are profit-oriented and require the regular payment of premiums, which is quite a burden for the rural poor who do not have a stable income.

Lu believes providing a livelihood for the rural elderly should be the first and foremost duty of the government. Under the current situation, the best arrangement is to adopt a multi-level social security system in the countryside. In China's eastern region, which has a higher economic development level, the premiums should mainly come from personal savings while the minority comes from government subsidies. In this region, commercial insurance can be introduced.

In the poorer central and western regions, a welfare pension insurance model should be adopted that relies mainly on subsidies from the central and local governments. As for poverty-stricken farmers, the country should completely take care of them and cover them under a social welfare network when they get old, she said.

"Every farmer should be informed about all the models they can choose from and the advantages and shortcomings of each model; the government cannot choose for the farmers," Mu Guangzong, a professor at Peking University, told Beijing Review.

"The Chinese Government should learn lessons from industrialized countries in providing subsistence for its rural seniors," said Lu. "The idea of social security for everyone must be set up, which will help to eventually bridge the gap in pension systems between rural and urban senior citizens."



 
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