Urban-Rural Integration Reform in Progress

AN executive meeting on Feb- ruary 7， 2014 presided over by Li Keqiang， Premier of the State Council， Chinas cabinet， decided to merge the old-age insurance schemes for rural and urban residents into a unified pension system， marking a major breakthrough in urban-rural integration. Previously， China had different pension schemes for civil servants， urban employees， urban residents and rural dwellers. The new pension program is a longawaited reform， bringing an end to the countrys dual urban-rural structure.

Better Social Security for Farmers

Xiao Jun， a migrant worker from Chongqing Municipality in southwestern China， has been roaming from one city to another in the Pearl River Delta for a dozen years， working over 10 hours a day. His monthly wage has steadily climbed from a few hundred yuan to over RMB 2，000 during the past years. But his savings are still meager. “I spent most of my earnings on my family. So I have nothing to fall back on in my old age – except my children，” he said.

It is commonplace in Chinas countryside that seniors rely on their adult children for financial support. Annuities for rural residents didnt appear in China until 1992 when the Ministry of Civil Affairs promulgated an outline for a trial implementation of a social pension system for farmers at county level. The program was later adopted by some regions， but eventually fizzled out. As the funds came solely from pensioners contributions， the plan was nothing more than a glorified bank deposit system. Farmers saw no point in joining it when the expected retirement benefits would， in fact， come entirely out of their own pockets. Whats more， the early 1990s average rural income was low. Few families had money to put aside for 30 or 40 years down the line when they were struggling to pay for daily necessities in the here and now.

In September 2009， the State Council trialed a new old-age pension system for rural residents in parts of China. Under the policy， participants regularly contributed premiums， whose amounts they decided， to individual insurance accounts also funded by central and local governments， and in some regions by the participants communities. On reaching 60 years of age， policyholders could start to receive payments from their accounts plus a RMB 55 “basic pension” from the state. Farmers who were 60 or over at the inception of the program were still entitled to the basic pension despite having made no personal contributions. By 2012 this program had largely covered the entire rural population of China.

Balanced Rural-urban Development

Every year the “No.1 Central Document，” the first policy document issued by the Central Committee of the Communist Party of China and the State Council， signifies the priorities of government work in the year. This year， amid other reforms， the government vows to improve the mechanisms for coordinating urban and rural development by improving rural living conditions and providing equal basic public services in urban and rural areas. The goal is to ensure even exchanges of production factors between the city and the countryside to give farmers equal access to the modernization process and its benefits.

This demands replanning of urbanrural development that can improve the distribution of industrial projects in cities and urban areas to utilize their respective advantages， boost free flow of urban and rural labor， and ensure rational use of key production factors such as capital， land and technology. In 2009， Zhuozhou City of Hebei Province was selected as a testing ground for this restructuring.

According to the citys plan for its downtown area， towns and villages， its territory of 742 square kilometers is divided into a central area， five clusters of bigger towns and 49 conglomerations of smaller towns that cover all 404 administrative villages. This layout is expected to stimulate population flow from rural neighborhoods that scatter sparsely across the region to towns， where new communities with modern amenities will be built.

By pooling residents of several villages， these new communities can make better use of land. They can also make overall plans for housing， transport， and infrastructure of utilities， communications， education， public security and recreation. Each will build a kindergarten， primary school， elderly care home， hospital and sewage treatment plant. And every household will have its own garage and warehouse. This concentration of population and resources helps foster a more efficient and convenient lifestyle.

Zhuozhou is also experimenting with the farm economy pattern in the agricultural sector. It merges small plots of farmland contracted to individual rural families through land transfer， and establishes bigger plantations by introducing corporate investment and modern management. The city proactively solicits urban capital to invest in such plantations. This creates jobs for resident farmers， boosting their incomes and bringing about favorable interactions between industrialization and the rural population.

In short， the replanning for urban and rural areas aims to achieve optimal allocation of resources and maximum use of infrastructure and public services， also to assign cities and the countryside the respective roles they can best play in national economic and social development. This can make the best out of resources and capital， improve livelihoods and the eco-environment and create better living and working conditions in rural areas.

Equal Access to Public Services

At the national educational work meeting on January 15， 2014， Education Minister Yuan Guiren told participating officials that China will make overall arrangements for compulsory education resources （totaling nine years from primary school to junior middle school） in urban and rural areas to ensure their even distribution， and improve school facilities and teaching quality in the countryside. The state will increase funding to rural primary and junior middle schools that fall below standard as well as subsidies for rural students， the minister said.

In addition to education， China is also working to give rural residents access to employment， public services and social security equal to that of city dwellers. This will level the ground for all citizens to equally participate in the modernization drive and enjoy its fruits. This is the ultimate goal of the urban-rural integration reform.

Chengdu， capital of Sichuan Province， was the first city in China to abolish the hukou household registration system that classifies residents as either “urban”or “rural.” Starting in 2004， all permanent residents in the city were registered as simply “resident.” This change was applied to the whole local population by the end of 2006. The institutional obstacle to farmers enjoying equal access to public services was thus effectively eliminated.

Under the new policy， though no longer tagged “rural residents，” farmers can retain the right to use their contracted lands and entitlements to the collective assets of their respective villages. Those who voluntarily relinquish their assigned homestead in the village and move into cities and towns are eligible for public housing.

Changsha City of Hunan Province took the lead in administering unitary medical insurance for its urban and rural residents. This practice has the merits of placing insurance funds under uniform management， collecting and publishing information on a single platform， and allowing the same payment policy for all insured， which contributes to social justice.

In 2012， the medical insurance schemes for Changshas urban and rural dwellers were fused into one. This change significantly expanded the range of medical services and providers as well as medications covered by the insurance for rural residents. In Changsha County， for instance， rural policyholders are entitled to 2，421 medicinal products， almost double the previous 1，300， that are paid for by their insurance， and 68 local hospitals have joined the insurance plan.

Social changes always take place in tandem with economic transformation， manifest in the gap between Chinas urban and rural development. This chasm is apparent in education， health care， social security and other realms. The overriding priority of Chinas urbanrural integration reform is to close this gap and realize balanced development in its cities and countryside.