Social security payment cuts on way

Chinese Premier Li Keqiang presides over a symposium to discuss the nation's economic situation with the heads of several major provincial regions, in Beijing, capital of China, April 11, 2016. [Photo/Xinhua]

China will cut social security payment requirements to lower the burden on businesses, and increase efforts to stabilize employment, Premier Li Keqiang said on Monday.

"The government will support various localities, in light of their local conditions, to reduce contributions to the five major insurance programs and housing provident funds," Li said at a forum in Beijing on the national economic situation.

He added that this will be conducted "in a step-by-step fashion and under a unified national framework".

The five major programs cover endowment, medical insurance, unemployment, employment injuries and maternity insurance.

Under the current arrangement, employers must pay just over 39 percent of their payrolls into the five social insurance programs.

Li's remarks follow his promise at the end of the national legislative session in March, when he said local governments would be authorized to cut this percentage adequately.

No specific measures were announced on Monday, but Li said that a national guideline on the change will be available very soon.

Zeng Xiangquan, head of the School of Human Resources at Renmin University of China in Beijing, said China's social insurance programs are among the world's most expensive, meaning excessively heavy burdens for enterprises and workers.

"Lowering the percentage is an important way to implement supply-side structural reform," Zeng said. "It aims to relieve the burden on enterprises and local governments."