Re-assessment of China’s Social Insurance System from the Perspective of Its Reliance on Public Finance

 

Xiong Wei （Wuhan University）

 

Abstract:Social insurance is a mechanism of mutual assistance among the insured based on actuarial balance principle where all the rules concerning revenue and expenditure shall be governed by law. Accordingly it is suitable for social insurance to be legally separated from public finance, thus to prevent it from governmental intervention directly. For this purpose, it is not necessary to include social insurance funds into public budget plans. Instead, they should operate on the basis of self-governance. There is no reason to exclude government from decision-making of social insurance affairs. However, public participation and fiscal transparency are needed simultaneously. While state aids are needed to social insurance, they must be out of specific reasons. Normally, social insurance has to maintain a balanced budget by itself.

 

Key words:social insurance; fiscal reliance; public finance; state regulation