China’s Social Security Card records personal information, supports information inquiries, and enables the handling of a range of individual services. It can also carry financial functions and be adapted for additional public service uses. It has been issued to roughly 1.39 billion citizens by June 2025. Photo: IC PHOTO

The Five-Year Plan (FYP) constitutes the top-level design of China’s national governance and serves as the implementation framework and program of action for the country’s social security system. Guided by the FYP as its “blueprint,” China’s social security system has undergone a step-by-step advancement process—from incubation and birth to pilot experimentation, system formation, steady growth, expansion, and ultimately high-quality development.

From incubation to birth

In the early years of reform and opening-up, many sectors faced the urgent need for revitalization. During the Sixth FYP (1981–85) period, efforts were made to properly address welfare compensation issues left over from the planned economy under the traditional labor insurance and welfare system. Necessary adjustments were made to unreasonable insurance schemes covering medical care, sick leave, maternity, and death. Meanwhile, the FYP took a forward-looking approach by proposing to initiate research into the establishment of a reasonable social insurance system, accumulate experience through pilot programs, and gradually expand implementation.

The Seventh FYP (1986–90) marked the first appearance of the term “social security” within China’s FYPs. It explicitly called for gradually establishing a preliminary social security system with Chinese characteristics, including diversifying social security funding sources, reforming the management system, and combining socialized management with work-unit-level management.

The Eighth FYP (1991–95) further advanced the goal of establishing a full range of social insurance and social security systems, alongside the active development of social welfare undertakings. The 1991 State Council Resolution on the Reform of the Pension System for Enterprise Workers and the 1995 Notice on Deepening the Reform of the Old-Age Pension System for Enterprise Employees marked the official birth of China’s modern pension insurance system.

From pilot programs to system formation

The period spanning the Sixth to the Eighth FYPs represented a stage of breakthroughs in pension-centered reforms, while the Ninth and Tenth FYPs saw a shift toward multi-point pilot projects, comprehensive advancement, and gradual system formation. The essence of conducting multiple pilots was continuous “trial and error,” a distinctive feature of China’s social security reform that greatly reduced opportunity costs and shortened the reform process.

“Comprehensive advancement” refers to reforms under the Ninth FYP (1996–2000), which called for accelerating reforms across multiple insurance schemes, including pensions, unemployment, and medical insurance. For the first time, the FYP proposed building a multi-tiered social security system, introducing enterprise supplementary pension insurance and individual savings-based pension insurance; encouraging commercial insurance as a supplement to social security; implementing pension and medical insurance models that combined social pooling with individual accounts; and establishing a rural cooperative medical insurance system.

“Gradual formation” had two dimensions: the expansion of the range of insurance programs, and the parallel development of contributory and non-contributory schemes. The Tenth FYP (2001–05) was the first to divide social security into two branches— “social insurance” and “other social security programs” (including social welfare, charities, job placement for demobilized servicemen, and social mutual aid). It also proposed strengthening the system of subsistence allowances for urban residents, establishing a medical assistance system, and promoting philanthropic initiatives.

From development to expansion

The 11th and 12th FYPs witnessed a period of rapid economic growth and a phase of strengthening and expanding the social security system. To keep pace with economic development, the 11th FYP (2006–10) emphasized expanding social security coverage, exploring the establishment of a rural endowment insurance system, and establishing the basic new-type rural cooperative medical system. Where conditions allowed, localities were encouraged to introduce rural minimum living standard security systems and improve rural social relief systems, while giving commercial insurance a greater role in supporting social security. In urban settings, it proposed enterprise supplementary insurance schemes and social security coverage for rural migrant workers. It also addressed the coordination of urban and rural social security, calling for higher urban subsistence allowance standards, the establishment of the urban–rural medical assistance system, and for the first time, introduced the concept of “financial investment in social security” by increasing public financial support for contributory programs.

The 12th Five-Year Plan (2011–15) introduced a guiding principle for social security: the broad coverage, basic assurance, multi-level, and sustainable principle. It called for improving both employee and resident pension schemes, promoting the effective linkup of the urban and rural pension protection system, and advancing reforms of the pension and insurance system at state organs and institutions. It also proposed developing vocational pension funds and allocate state-owned assets to replenish the national social protection fund and its investment operations. Moreover, for the first time, social relief was formally articulated as an independent system parallel to social insurance, requiring the establishment of a dynamic readjustment mechanism on the standards of low-income insurance to ensure full coverage of eligible beneficiaries.

Under these two FYPs, China completed major institutional integrations. In 2014, the new social endowment insurance system for rural residents and the social endowment insurance system for urban residents were integrated into the urban and rural residents pension insurance system. In 2016, the new rural cooperative medical care system and basic medical insurance for urban residents were merged into the universal basic medical insurance system. Benefit levels across social security programs continued to rise during these two plan periods—the average annual increase in basic pension benefits for urban enterprise employees, for example, approached 10% for 10 consecutive years.

Entering new era

Since the 18th National Congress of the Communist Party of China, the construction of the social security system has been given unprecedented prominence. The 13th Five-Year Plan (2016–20) established the principle for reforming the social security system: “We will continue to strive toward achieving complete coverage and ensure that benefit levels are appropriate, rights and obligations are clearly delineated, and the system operates in an efficient manner.” In the realm of social assistance systems, it proposed improving the subsistence allowance program, strengthening policy integration, and promoting program integration.

The 14th Five-Year Plan (2021–25) sets forth a series of breakthrough reform goals across all social security domains. These include achieving the coordinated national management of basic old-age insurance funds, improving the system for transferring state capital to increase social security funds, and strengthening the social security strategic reserve fund. “A multi-tiered and multi-pillar old-age insurance system will take shape, which will see an increase in the coverage ratio of enterprise annuity, and the well-regulated private pensions as the third pillar. The coverage of unemployment insurance and work-related injury insurance for professional workers will be expanded, and relevant plans will be made at the provincial level.” The Plan also proposes that “efforts will continue to ensure stable and sustainable funding for basic medical insurance and adjust medical benefits by revising payment policies for medical insurance premiums and developing lists for medical benefits. Overall planning of basic medical insurance shall be made at the municipal and provincial levels. Improvement measures are needed for the general support mechanism for covering outpatient medical bills under employee basic medical insurance and the system of medical insurance and aid for treating serious diseases.” It also proposes that “it is necessary to make timely adjustments to the catalogue of medicines covered by medical insurance. A diversified, compound medical insurance payment model based on disease-related payment is under way,” and that “efforts are ongoing to better supervise medical insurance funds to ensure a long-term care insurance system.”

Guided by the 13th and 14th Five-Year Plans, long-standing structural reforms have made historic breakthroughs. In 2015, pension reform for government and public institutions was implemented nationwide; occupational annuities and pilot programs for individual tax-preferred health insurance were launched. In 2016, long-term care insurance pilots began. In 2017, the pension fund investment mechanism was established. In 2018, the Measures for Enterprise Annuities took effect alongside the founding of the National Healthcare Security Administration. In 2019, centralized procurement of drugs was initiated, with significant reductions in social insurance contribution rates. By 2020, a tiered, categorized, and urban–rural integrated social assistance system with Chinese characteristics was fully implemented. In 2021, the transfer of state-owned capital to supplement the national social security fund was completed. In 2022, national pooling of the first-pillar pension system was realized and third-pillar pension pilots began. In 2024, nationwide implementation of the third-pillar individual pension scheme commenced. As of 2025, the progressive raising of the retirement age is underway, and the long-term care insurance system is in place nationwide.

Toward long-range objectives through year 2035

From the Sixth to the 14th FYP, China’s social security system has developed continuously, enhancing the people’s sense of gain, happiness, and security, and providing a solid foundation for Chinese modernization. Looking ahead to the 15th FYP (2026–30), demographic trends such as low fertility rates, population aging, and regional population divergence will become more pronounced, posing new challenges to social security reform. The Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development indicates that in building a universal, basic, and protective system to secure people’s livelihoods, promote social equity, maintain stability, and achieve common prosperity, “social security” remains a core concept. The goal articulated in the proposal— “the social security system should be refined and put on a more sustainable footing”—is both inspiring and forward-looking.

Zheng Bingwen is the executive deputy director of the Zhengzhou Research Institute under the strategic cooperation between the Chinese Academy of Social Sciences and the Zhengzhou Municipal People’s Government of Henan Province.