ABSTRACT
In China, the dual economic system is accompanied by an institutional segmented labor market. Within such phenomenon coexist the “overplay” and the “underplay” of the welfare-related arrangements. The social security system runs rather differently in China’s urban and rural areas, with the majority of resources being allocated to the former. Social security reform is a major subject in China’s economic transition. This reform was in exploratory phase in the 1980s and later ushered into the implementation stage in the 1990s. The most difficult part of social security reform lies in how to achieve balance between individual responsibility and social assistance. Almost all countries undergoing the reform of the welfare system have to deal with the problem as government bearing excessive responsibility and risks. Reforms of the welfare system presumably sweep out across the world, which China should consequently draw lessons from.
