In pre-reform China, the socialist state fulfilled the needs of society from cradle to grave. Child care, education, job placement, housing, subsistence, health care, and elder care were largely the responsibility of the work unit as administered through state-owned enterprises and agricultural communes and collectives.
As those systems disappeared or were reformed, the “iron rice bowl” approach to social security changed. Article 14 of the constitution stipulates that the state “builds and improves a social security system that corresponds with the level of economic development.”
In 2004 China experienced the greatest decrease in its poorest population since 1999. People with a per capita income of less than 668 renminbi (RMB; US$80.71) decreased 2.9 million or 10 percent; those with a per capita income of no more than 924 RMB (US$111.64) decreased by 6.4 million or 11.4 percent, according to statistics from the State Council’s Poverty Reduction Office.
Social security reforms since the late 1990s have included unemployment insurance, medical insurance, workers’ compensation insurance, maternity benefits, communal pension funds, and individual pension accounts.