Editor's note: In order to further deepen the study, publicity, and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and to gather a strong force for advancing towards the second centenary goal, the Cyberspace Administration of China and Guangming Daily jointly organized the "New Theory of Practice: China's Answer Sheet to the Modernization Process" online theoretical dissemination column. A series of theoretical commentary articles and new media products have been launched on Guangming Daily, summarizing the valuable experience of the Communist Party of China in leading the new path of Chinese style modernization, fully demonstrating the characteristics and advantages of the new path of Chinese style modernization, and understanding and explaining the new form of human civilization created by socialism with Chinese characteristics.

Author: Wang Zengwen (Deputy Director and Professor of the Social Security Research Center at Wuhan University); Chen Yucheng (PhD candidate at the Social Security Research Center of Wuhan University)

At the celebration of the 100th anniversary of the founding of the Communist Party of China, General Secretary Xi Jinping put forward the important proposition of "a new path of Chinese style modernization". At the 10th meeting of the Central Committee for Finance and Economics, General Secretary Xi Jinping further emphasized that common prosperity is the essential requirement of socialism and an important feature of Chinese style modernization. We must adhere to the people-centered development ideology and promote common prosperity in high-quality development. In the process of pursuing common prosperity for all people, it is the valuable concept of Chinese path to modernization to realize that the fruits of reform and development are shared by all people.

Social Security Driven by the Goal of Common Prosperity

Common prosperity is a basic goal of Marxism and an essential requirement of socialism, as well as a basic ideal of our people since ancient times. The CPC, united and leading the Chinese people in their unremitting struggle to promote economic and social development, is ultimately to achieve common prosperity for all people. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China put forward for the first time the major deployment of "achieving more significant substantive progress in common prosperity for all the people". Based on the connotation of common prosperity, we can see that "common" emphasizes "common prosperity for all people", that is, all people share the fruits of development, which is also the basic value orientation of Chinese path to modernization. 'Prosperity' encompasses the material and spiritual abundance of the entire population. Therefore, one of the most fundamental measures to achieve common prosperity is to raise people's income levels. The 10th meeting of the Central Financial and Economic Commission pointed out that it is necessary to expand the proportion of middle-income groups, increase the income of low-income groups, reasonably regulate high-income, crack down on illegal income, and form an olive shaped distribution structure with a large middle and small ends. Among them, in addition to expanding the "cake" through economic development, the conference also emphasized the need to increase the regulatory efforts and precision in taxation, social security, transfer payments, and other areas.

(Comic: Zhang Tingting)

Looking at the practice paths of major developed countries around the world, it is usually based on promoting economic development and establishing a sound social security system to help narrow the income gap among members of society. Since the reform and opening up, China has steadily promoted the reform of various social security systems, and the role of social security in the overall development of the Party and the state has been continuously strengthened, gradually developing into an important socio-economic system of the country. Currently, promoting common prosperity in high-quality development has become a broad consensus among all people. With the continuous advancement of common prosperity, social security will play a crucial role in income redistribution.

Firstly, China has established the world's largest social security system. As of the end of 2020, the number of people participating in China's basic pension insurance was nearly 1 billion, the number of people participating in basic medical insurance reached 1.36 billion, and the number of people participating in unemployment and work-related injury insurance was also over 200 million. Therefore, social security can play an important role in income redistribution. Secondly, as an extremely important component of the social security system, social insurance can disperse the economic risks faced by insured individuals due to diseases, disabilities, and occupational injuries through socialized mutual assistance. In this process, insured members pay premiums, combined with subsidies from various levels of government to form a social security fund, which can be paid to insured members who suffer from economic risks such as illness and occupational injury, achieving income redistribution. Finally, in addition to social insurance, social assistance, social welfare, and social welfare within the social security system are all funded by recipients receiving government financial subsidies to maintain their basic living needs. The government's fiscal revenue mainly comes from the tax revenue paid by members of society. Based on the characteristics of progressive tax system, high-income earners often pay more taxes. Therefore, social assistance, social welfare, and social welfare also play a role in income redistribution.

Strengthening the value orientation of social security and enhancing its income redistribution function

Sharing the fruits of development by the people is the value concept of Chinese path to modernization and the internal requirement for achieving common prosperity. Steadily increasing people's income, expanding the proportion of middle-income groups, and accelerating the formation of an "olive shaped" income distribution pattern are strategic needs for promoting common prosperity at present. Strengthening the value adherence of social security and enhancing its income redistribution function are important ways to promote this strategic decision.

（1） Enhance the risk diversification capability of social security

At present, the risk diversification ability of social security depends not only on the coverage scope of social insurance, but also on the overall level of social insurance. On the one hand, while maintaining the stability of the current social insurance participation rate, it is necessary to quickly include new industry employees in the scope of social security protection. In 2020, the No. 1 central document of the Central Government put forward guidance on the pilot work of occupational injury protection for employees in new business types. In this situation, the restrictions on insurance coverage for employees in new business formats can be broken. At the same time, the nursing expenses and work stoppage compensation borne by the employer can be transferred to the commercial insurance company through participation in supplementary commercial insurance. On the other hand, improving the overall level of social insurance and enhancing mutual assistance through expanding the fund pool. For example, to achieve nationwide pooling of pension insurance as soon as possible, and gradually transition medical insurance from city level pooling to provincial-level pooling. By enhancing the risk diversification ability of social security, reducing catastrophic economic risks caused by diseases, aging, and accidents among members of society, avoiding them from falling into poverty due to catastrophic economic risks, and ensuring the smoothness of their consumption.

（2） Gradually enhance the income redistribution role of social security among groups and regions

The treatment gap of social security between groups and regions often plays a reverse regulatory role in income distribution. We can follow the reform sequence of easy to difficult, first narrowing the gap in protection benefits based on occupational groups, and gradually achieving a reasonable distribution of benefits between urban workers and urban and rural residents in the fields of basic pension and basic medical insurance. At the same time, through the integration of urban and rural areas such as pension insurance and basic medical insurance, the treatment gap between urban and rural areas will gradually be narrowed. On the basis of the above, further narrowing the treatment gap between regions through the improvement of social insurance pooling levels, such as achieving national pooling of basic pension insurance and reducing regional differences through the allocation of pension funds at the national level. Basic medical insurance gradually reduces regional differences within the province on the basis of provincial pooling, and then moves towards national pooling, achieving subsidies for areas with strong fund absorption capacity and weak fund absorption capacity.

（3） On the basis of institutional integration, gradually enhance the overall level of social security coordination

At the beginning of the establishment of the modern social security system, in order to reduce the difficulty of implementing the system and be limited by the significant differences in different regions, it was often the basic principles for the establishment of the system introduced by the central government. Based on the basic principles of the central government, each region formulated corresponding detailed rules according to its own actual situation. This effectively promoted the expansion of social security coverage and provided many successful local experiences and models at the beginning of the establishment of the system. But with the improvement of the overall planning level and the narrowing of the gap in protection benefits, the regional differences in the system will affect its further effectiveness. Therefore, with the continuous integration of systems and the improvement of overall planning levels, the relevant systems behind it, especially the fundraising system, should gradually be unified. Of course, China has a vast territory and there are still significant differences in economic and social conditions among different regions. The unification of the social security system should also follow a process from easy to difficult and from region to country.

（4） Exploring the progressivity of social security contributions

To better leverage the income redistribution function of social security, we can draw on the progressive characteristics of the tax system and explore the implementation of a progressive social security payment model. Currently, in order to improve the enthusiasm of social members to participate in social insurance, China follows the principle of "pay more, get more" in the field of basic pension insurance. In the field of medical insurance, the amount of personal medical insurance contributions for urban employees is linked to their salary income, and their medical insurance benefits are also higher than those of urban and rural residents. At the beginning of the establishment of the system, this effectively increased people's enthusiasm for participating in insurance and helped to rapidly expand the coverage of the system. However, in the context of achieving universal medical insurance, especially after promoting common prosperity has become the theme of the times, further consideration should be given to the Progressivity of individual contributions, and a payment system should be implemented where the proportion of individual contributions is linked to their income level. The higher the individual's income level, the higher the proportion of individual contributions to social security fees. On the expenditure side of the fund, it is necessary to narrow the treatment gap between different groups in the same security project, so as to effectively play the income redistribution function of social security.

（5） Moderately increase the level of social security benefits on the basis of economic development

In order to meet people's needs for a better life and promote common prosperity, social security needs to distribute the "cake" more fairly on the basis of expanding it. Therefore, it is necessary to actively guide social security to adapt to the level of economic development in our country, and moderately improve the level of social security benefits on the basis of economic development. On this basis, further improve the multi-level security system. At the same time, actively promote the role, limitations, and relationship between basic social security and multi-level security systems to the public, establish occupational pensions, improve supplementary medical insurance, etc, so that members of society can actively participate in multi-level security systems while enjoying basic security, thereby achieving better risk protection.

Original URL link: https://theory.gmw.cn/2021-09/18/content_35175547.htm