Social insurance reform in China.
The responsibility for collecting social insurance contributions will be transferred from various local departments to the tax authorities alone on January 1 next year. This includes basic social insurance, basic medical insurance, unemployment insurance, work injury insurance and maternity insurance. The change takes place in a broader context of institutional reforms to improve administrative efficiency, transparency and accountability.
Companies may also find ways to get around the regulations, for example by hiring workers on temporary contracts.
A better enforcement of corporate social insurance contributions will be a significant step towards a functioning welfare state in China.
Tax cuts and reduced contribution rates will help to soften the impact on firms.
