Social Security Internationalization During China’s Reform and Opening Up from 1978 to 2018— Viewed from the Paradigm of a Community with a Shared Future for Mankind

Jia Yujiao＊

Abstract: China’s reform and opening-up policy, launched in 1978, marks the start of the internationalization process of its social security system. This paper takes the notion of “a community with a shared future” as the perspective to analyze the internationalization of social security in the process of China’s reform and opening up. Based on China’s developments in globalization, it divides the internationalization process of China’s social security from 1978 to 2018 into three stages: the stage of reshaping the domestic social security system with reference to the best international practice; the stage of achieving bilateral or multilateral alignment on the premise of equality and mutual benefit, and the stage of injecting Chinese wisdom in social security into the development of global social security. The trajectory of the development of China’s social security internationalization shows the incremental evolution within the country, between nations, and in the world community. This paper studies the internationalization process to show China’s grand achievements in the four decades of reform and opening-up and to demonstrate Chinese wisdom and confidence.

Keywords: reform and opening-up; social security; internationalization; community

Introduction

The modern social security system, as the crystallization of modern civilization,has promoted the sharing and mutual benefit of achievements in economic and social development.It arises from the real needs of the development of capitalist industrialization and is an endogenous institutional response to the new issues and challenges that capitalism faces after it enters an emerging stage of industrialization. With the progress of industrialization across the Western capitalist countries, the social security system began its early stage of internationalization. According to the roadmap sorted out from historical records,the social security internationalization started from Germany and gradually spread to Europe from the end of the 19th century to the beginning of the 20th century. After the two world wars of the 20th century and the economic panic that took place between the two wars, the concept and principles of a welfare state began to spread throughout the Western capitalist world. While Europe saw the transition from a social security system to a welfare state system, the United States became a new member of the social security internationalization process and ushered in a new chapter for overall social reconstruction within the country. At the same time, modern social security was gradually integrated into the process of national reconstruction in independent emerging countries. It can be seen that the social security internationalization first took place on the European continent, followed by North America, Asia, and Latin America.The modernization has continuously driven and enhanced the internationalization of the institutional framework, major items and modes of operation of social security. Along with the deepening of global economic integration, people expect to have a more universal social security rule available so that it can interact with the economic systems and other social policies to meet the development needs of global social integration.①International Labor Organization, Repertoire Des Instruments Internationaux de Securite Social. Geneve, Bureau International du Travail; Holloway, J. Social Policy Harmonisation in European Communuty, 1981.

Amid the expanding process of the internationalization of social security as promoted by modernity, China officially started its internationalization of social security at the end of the 1970s.②The academia agrees that the development of social security in China started from the 1950s in the form of a state-labor insurance system, which fit in with that period of socialist planned economy.In the meantime, it unveiled the Chinese way of internationalization of social security. If modernity is regarded as the historical context of the grand process of internationalization of social security, then reform and opening up is the specific context of internationalization of social security in contemporary China. It is in the historical process of reform and opening up that China continues to draw on world experience for its social security,and at the same time, it seeks to display China’s personality and manifest Chinese wisdom.

1. A review of China’s social security internationalization

1.1 A review of previous studies on the internationalization of social security in China

From the perspective of the practice of the social security system since China’s reform and opening up, the system is governed by both domestic and international logic. In other words,internationalization has become a necessary and realistic consideration for the development of China’s social security system. As mentioned above, the internationalization of social security has become the inherent meaning of modernization and industrialization extension with universal significance. Therefore, before there was any study on the internationalization of social security, the practice had already taken place, and with the deepening of globalization, its connotation keeps expanding. Based on summarizing the practice of social security internationalization and conducting relevant research, the connotation is categorized into three dimensions: dynamic, static, and interactive.The internationalization of social security in the dynamic dimension describes the international convergence of social security concepts, principles,basic institutional frameworks, major items and modes of operation①Sun, 2001. The internationalization of social security in the static dimension shows that globally speaking, the social security system presents a common aspect that dissociates from regional differences. From the interactive dimension,it can be divided into three levels: bilateral, regional,and global②Kahn & Kamerman, 1982.

1.1.1 Bilateralization of China’s social security

As far as the bilateralization of China’s social security is concerned, it shows the characteristics that are compatible with the integration process of China’s economy into the world economy. Driven by the integration of the world economy, the factors of production have been rationally allocated on a global scale, and the economic structure has been continuously optimized③Long, 2001; Cao, 2005. This has become the structural premise of bilateralization or multilateralization of social security in China.The core is to address the issues on how to protect the social security rights of workers under the background of transnational flow of labor④Wang, 2010.Because there are differences between China and other countries in social insurance systems, it is necessary to carry out negotiations and cooperation in the field of social insurance in accordance with international practice and reciprocity principles and to promote the alignment of bilateral or multilateral social insurance systems to expand the coverage as much as possible. At the same time,during the process of conducting equal dialogues on and realizing effective engagement of social security systems, the internationalization of China’s social security has been continuously improved so that it can play a positive role in boosting economic transnationalization, regionalization,and globalization. Viewed from the distribution of the years when China signed bilateral agreements on mutual recognition of social security with other countries, the years can be roughly divided into two periods: 2000-2012 and 2012-2017⑤Guo, 2003. In the first period, China mainly signed bilateral agreements on mutual exemption of social security with Germany, South Korea and other countries.In the second period, the countries that had mutual exemption of social security with China expanded to more countries such as France, the United States,Italy, Switzerland, and Spain.⑥International Bilateral Agreements of Chinese Government Concerning Social Security Contributions of Foreign Nationals (Updated to June 2017). Retrieved from www.sohu. com/a/ 149159156_617158.The bilateralization of social security demonstrates that the development of China’s social security system needs to consider both domestic and international factors.

1.1.2 Regionalization of China’s social security

Driven by the irresistible force of economic globalization, economic and social links between different countries have become more regionalized due to geopolitical interests. For regional connections between countries, the alignment in the economic field is of great importance. In addition, interactions in such fields as ideology,culture, identity, and social policies play a decisive role①Amitav, 2000. The regionalization of Asia in the modern context originated in the economic development of West Asia’s oil exporting countries in the 1950s and 1960s②Jia, 2014. The economic miracle in East Asia in the 1960s and 1970s fully ushered in the era of regionalization of an Asian economy③Wang, 2003. As the exchanges among Asian countries have become more intensive, social security should be more adaptable. Therefore, scholars and government officials in some countries advocate that each country should commit to the congruence of social security in the region and explore a consistent minimum social security standard.④The Second Asian Roundtable on Social Security (AROSS): Conference proceedings on a unified Asian social security and minimum standards. 2010.

1.1.3 China’s social security internationalization

Since the 1990s, especially since China’s accession to the World Trade Organization (WTO)in 2001, the ratio of China’s imports and exports to GDP has risen rapidly, much more than other populous countries⑤China Compendium of Statistics 1949-2004, 2005. Through the market economy permit, China boosted the practice of economic globalization. Driven by this practice, the issue of social security globalization emerged, and it has become a topic in the deepening of economic globalization⑥Townsend, 2005. To this end, the framework of China’s social security system has gradually been adjusted to be in line with international standards,such as the development of a “multi-pillar” system of social security, and active exploration of marketoriented resource allocation mechanisms. From the perspective of China’s overall social security system, it shows features common to other countries.⑦According to Robert Keohane and Joseph Nye, globalization has produced a more complex and interdependent national system in which cross-border regulations and organizations have gained influence. James Rosenau believes that drastic globalization has forced governments and societies to be adapted to such a world, in which a clear distinction between international and domestic, external and internal, has ceased to exist.However, the internationalization of social security in China still faces many challenges.

1.2 A new comprehension under the paradigm of a community with a shared future for mankind

The Report of the 19th National Congress of the Communist Party of China (CPC) explicitly pointed out that efforts should be made to build a community with a shared future for mankind.⑧In September 2015, at the summits of the United Nations, General Secretary Xi Jinping fully elaborated on the vision, laying emphasis on the need to forge partnerships in which countries treat each other as equals, engage in mutual consultation and show mutual understanding, create a security architecture featuring fairness, justice, joint contribution and shared benefits, promote open, innovative and inclusive development that benefits all, increase inter-civilization exchanges to enhance harmony, inclusiveness and respect for differences, and build an eco-system that puts mother nature and green development first.The theory of a community with a shared future for mankind is a contemporary interpretation and embodies the essence of Chinese civilization. It indicates the new direction for the globalization that has history of four or five hundred years old, and becomes the key to the predicament of globalization. It highlights the Chinese wisdom which features thousands of years of civilization and represents a Chinese solution to globalization in the new era. It will surely drive the entire human society into a new stage of development.

The inception of the theory of a community with a shared future for mankind provides a new theoretical paradigm for research and practice of social security internationalization. Two major aspects are identified after summarizing this theoretical paradigm and can be described as:“sharing weal and woe” and “appreciating the culture of others for the prosperity of human civilization.” After globalization developed to its present stage, its drawbacks have backfired.Under the background of economic globalization and the worldwide expansion of Western modern civilization which acts as the dominant logic of such economic types, social change and mutual recognition of civilizations brought about by rapid economic development have not caught up with the trend.

The projection of economic globalization in the social fields of various countries is manifested by the emergence of new immigrants and destitute groups. Laborers of different races, genders,and physical conditions have broken the original patterns of labor markets in different countries and disintegrated the foundation of relevant social security systems which are usually integrated with the labor market.①Wang, 2002, pp.139-169; Dahrendorf, 1974, Dwyer, 2000Since social security qualifications are attached to individual citizenship,work intentions and abilities, new members who have not obtained the social rights status are obviously excluded. There are 48 countries and regions in Asia, and the gap between economic and social development is relatively large.②Zhu, 2011The population of poor countries has become an important branch of the migrant labor force.③Asian Development Bank, 2008Social relations, interactions and spaces among different groups are in a mutual shaping and constructive relationship.④Lu, 2015

The diversity of human civilization is the basic characteristic of the world and the source of human progress. Civilization clashes in the process of globalization originates from the derogation or annulment of one civilization over another. Only in an open and inclusive world where “the beauty of peace and harmony lies in difference” can globalization, the process of human civilization,continue to move forward. This is not only a guidance on values, but also a summary of the practice of social security internationalization of over one hundred years.⑤Wolfgang, 2017

1.3 From learning from other countries’experience to contributing Chinese wisdom:the double topics of China’s social security internationalization

From the consensus of scholars, China’s reform and opening up is driven by the entanglement of tradition and modernity, communism and capitalism.⑥Sun, 2004, pp.15-38From this, two dimensions (i.e.,international and domestic) can be obtained to represent the dominant logic. Under the influence of internationalization and localization, a picture of institutional development for change and reform is unfolded. In this picture, China presents the common features of a market-based, internationallyoriented and open economy.⑦Naughton, 2010Its institutional systems, including its social security system, exhibit a certain degree of international convergence. In this sense, internationalization has become an important perspective to interpret the changes in China’s social security system. Nevertheless,existing related research took domestic economic and social changes as narrative perspectives and clues, and ignored the impact of international factors on changes in China’s social security system after the reform and opening up, and the worldwide promotion of China’s social security programs.

At the end of the 1970s, the entire world was in a state of new contradictory movements, and it became increasingly clear that there was a close relationship between social security systems and national competitiveness and sustainable economic development. The reform of the social security systems, which is in line with the new contradictory movement, has become the core issue for the reconstruction of this new political,economic, and social order. Therefore, during this period, the experience and lessons learned from international social security developments are extremely abundant.①Zheng, 2011, p.6In this trend, China has also been integrated into the process of globalization,②The concept of globalization was first proposed by Oliver L. Reiser and Blodwen Daives, initially taking the meaning of“worldwide.”Later in 1985, American economist Theodore Levitt put forward the notion of“economic globalization,”which was further explained by Herman E. Daly who pointed out that“globalization” means economically speaking, the weakening and even disappearance of national borders, and the evolution of international trade from featuring comparative advantage to regional trade and even global trade featuring absolute advantage.which marked the historic reform and opening up for economic and social reconstruction. Reform is to create an open trend and opening up is to strengthen the influence of reform, thereby forming a contemporary context for China’s social security reform and restructuring. Based on the development trend of China in globalization, the process of internationalization of social security in China since 1978 is divided into three stages: the stage of reshaping the domestic social security system with reference to international best practice; the stage of achieving bilateral or multilateral alignment on the premise of equality and mutual benefit, and the stage of injecting Chinese wisdom in social security into the development of global social security. The trajectory of the development of China’s social security internationalization shows the incremental evolution within the country, between nations, and in the world community.

2. The internationalization period of building up social security rationality in China by learning extensively from other countries from 1978 to 2000

Societies, cultures and political forces have shown a certain degree of hyper-regional convergence③The challenge of global capitalism: The world eonomy in the 21st century, 2000.under the lead of technical and economic globalization, yet due to different preconditions for developing a market economy in China,④A comprehensive analysis of the measures of global economic reform can lead to the conclusion that marketization is the most important feature of internationalization and it is not only consistent but also synchronized with the trend of economic integration, financial liberalization, and resource capitalization.a unique logic line was formed, i.e. marketoriented reform – emergence of international social and economic issues – emergence of international social security issues – drawing on international social security experience – formation of rationality for China’s social security system. Throughout China’s social security internationalization during this period, it did not present a uniform and homogeneous development state but can be roughly divided into two phases: a phase starting from Deng Xiaoping’s speech during his southern tour in 1992 and a phase from China’s accession to the WTO in 2001, with a different pace of development.

2.1 A preliminary attempt on social security internationalization from 1978 to 1992

At the end of 1978, the Third Plenary Session of the Eleventh CPC Central Committee launched China’s reform and opening up, unveiling China’s efforts to transform into a market economy. To achieve a smooth social transformation, China adopted the strategy of gradual reform. To be specific, a dual-track approach and decentralization were applied from 1978 to 1992, which allowed the coexistence of planning and market mechanisms.①Naughton, 2010, p.75Apart from a traditional planned economy, a market economy was also promoted to gradually strengthen market momentum and replace the planned economic system.②This practice was initiated in rural areas of China. By the end of 1983, land contracting had been adopted in almost every village. This system stimulated the farmers’ enthusiasm for production, leading to a rapid increase in agricultural labor productivity, and reduced the time of farming. With more time for nonagricultural production, an increasing number of farmers began to work in township and village enterprises, enabling them to develop rapidly.In order to further promote the process of market economy reform, Deng Xiaoping called for a political system reform in 1986.However, his proposal was not fully implemented,leading to the resurgence of mandatory planning thinking.③Losing the opportunity to push forward and accelerate and with increasingly severity of administrative corruption, inflation and other issues, the reform was ended with the panic buying in 1988 and the political disturbance in 1989. After the economic crisis of 1988 and the political crisis of 1989, some politicians and theorists blamed this economic and political turmoil on the market-oriented reform, and accused that “abolishing the planned economy and realizing marketization” was to “change the socialist system and implement the capitalist system.”It was not until early 1992 when Deng Xiaoping made a series speeches during his southern tour to further promote the reform and opening up that the market economy finally gained its momentum of development④Wu, 2010, p.89. The 14th National Congress of the CPC Central Committee was held in October 1992, marking the establishment of China’s socialist market economy system.

In a sense, the social security system is the embodiment of the social and economic system itself⑤Ma & Zheng, 2005. Therefore, it is inherently an integral part of the transformation and development of the market economy while it also presents a synchronous trend of change. During this period, China’s social security was implemented in two aspects: restoring the social security system in the planned economy⑥After the end of the 1970s, China successively promulgated and implemented the Interim Measures for Retirement and Resignation of Workers (issued by the State Council in 1978), the Interim Measures for the Arrangement of Old, Weak, Sick and Disabled Cadres (issued by the State Council in 1978) and the Provisional Regulations on the Retirement and Recuperation of Old Cadres (issued by the State Council in 1980). Those measures and regulations were intended to solve the serious problem of 2 million people who could not retire during the Cultural Revolution in the past decade or so and restore the pension insurance system for employees of state organs, public institutions and enterprises with ownership by the whole people.and exploring the establishment of a modern social security system suitable for the emerging market economy⑦Zheng, 2010. Development of the modern social security system is synchronized with the process of the planned economy being influenced and replaced by the market economy under the dual-track approach. Facing the economic and social issues arising from the transformation to a market economy and the resulting social security challenges, China actively draws on the advanced experience of foreign countries and reshaped its social security system. In general, it mainly incorporated the proven social security practice of Western countries, including tripartite cost sharing,social management, and combining social pooling accounts with individual accounts.

In accordance with the timeline for replacing the planned economy with a market economy, reform of pensions of enterprise employees was initiated first. The social security practice of nearly a hundred years in developed countries have proven that the social provisions for the aged characterized by pension insurance have become a universal choice.Featuring legislative enforcement, cost sharing,unified organization and implementation, this model has become a definite measure to lift the heavy burden of pensions from employees of Chinese companies①Zheng, 2009. In terms of specific reform ideas,China has drawn on the social integration system of Europe and the full funding system of Southeast Asia and South America. In 1981, the Ministry of Labor and Personnel and the People’s Insurance Company of China facilitated the initiation of a pilot project of pension insurance reform. In 1984,they jointly issued the Letter on the Principles and Management Issues of Urban Collective Enterprises in Establishing a Pension Insurance System, which encouraged collectives to adopt a funding system as their pension insurance system. In 1991, drawing on the social pooling experiences of foreign countries,the State Council of China promulgated the Decision on the Reform of the Pension System for Enterprise Employees, which greatly promoted the development of social pooling for enterprise pension insurance.Issues regarding pensions for employees of the state organs and public institutions after the marketoriented reform was put forward in 1992.②In 1992, the Organization Department of the CPC Central Committee and the Ministry of Personnel issued the Opinions on Strengthening the Retirement Management of Cadres, proposing that efforts should be made to continuously improve the management ways of retired cadres in accordance with local conditions. From then on, pilot reform projects on pension insurance system of state organs and public institutions were implemented in accordance with the Opinions.

With the increase in the number of employees under labor contracts and the emergence of unemployed people under the market economy,the State Council promulgated the Provisional Regulations on the Trial Implementation of Labor Contracts in State-owned Enterprises in 1986,forming a tripartite cost-sharing system for pension insurance. Meanwhile, it also issued the Provisional Regulations on Unemployment Insurance for Stateowned Enterprise Employees, which outlined the initial framework of unemployment insurance.At the same time, medical insurance reform was imminent.③There were structural contradictions in the medical sector during this period. On the one hand, many workers under new forms of ownership did not have insurance. On the other hand, under the traditional medical insurance system, medical services were almost free of charge, and medical expenses rose significantly,especially from 1979 to 1982 and from 1986 to 1987. Medical expenses exceeded the growth rates of GDP and fiscal revenue. The specific data can be found in Statistics of Labor Wages in China (1949-1985) (China Statistics Press, 1987) and Statistics of Labor Wages in China (1986-1987) (China Statistics Press, 1989),China Statistical Abstract (2009) (China Statistics Press, 2009), China Compendium of Statistics 1949-2004 (China Statistics Press, 2005). This situation brought heavy pressure to enterprises, making enterprise restructuring rather difficult.In 1992, the Ministry of Labor formulated the Suggestions on Medical Insurance System Reform for Enterprise Employees and proposed the principles of expanding coverage and a tripartite cost-sharing system. In the same year,the leading group for medical system reform was established, indicating China was about to enter the reform phase of a new medical insurance system.

2.2 An inclusive period of China’s social security from 1993 to 2000

The year of 1992 when Deng Xiaoping made a series speeches during his southern tour marked the beginning of a new era in China’s reform and opening up. Since then, China’s reform and opening up has been accelerated, characterized by a development focus on deepening the reform of the market economy system, developing the labor market, and preparing for a full integration with the world economy. In the meantime, the transformation of China’s economic system encountered some setbacks and challenges. Under both internal and external challenges, China kept improving its social insurance system with an inclusive attitude,vigorously developed its social assistance system and build up the rationality of its social security system. In 1993, the Third Plenary Session of the 14th CPC Central Committee adopted the Decision of the CPC Central Committee on Some Issues Concerning the Establishment of a Socialist Market Economy, which marked the establishment of the market economy. Correspondingly, it proposed institutional arrangements to establish a multilevel social security system and to combine social pooling accounts with individual accounts.

Social Security Card

From the perspective of social security internationalization during this period, practice was carried out mainly in two aspects: one is to continue to deepen the social security reform approaches defined in the previous stage; the other is to continue to press ahead with the internationalization of China’s social security system in the face of the economic and social challenges arising from the deepening internationalization.

In terms of the former, the State Council promulgated three regulations in 1993, 1995 and 1997, clarifying the tripartite principle and purpose of the implementation plan for combining social pooling accounts with individual accounts of pension insurance, and the apportionment ratio of enterprises and individuals①West, 1999, and finally establishing the model for combining social pooling accounts with individual accounts.②In 1993, the State Council promulgated the Decision of the CPC Central Committee on Some Issues Concerning the Establishment of a Socialist Market Economic Structure. It explicitly stated the system goal that urban workers’ pension insurance and medical insurance premiums shall be jointly borne by employers and individuals, and social pooling account shall be combined with individual account. In March 1995, the State Council laid down new regulations for many issues by promulgating the Circular on Deepening Reform of the Pension Insurance System for Enterprise Employees and Annex I Implementation Measures of Combining Social Pooling Account with Individual Account for Basic Pension Insurance of Enterprise Employees (Part 1) and Annex II Implementation Measures of Combining Social Pooling Account with Individual Account for Basic Pension Insurance of Enterprise Employees (Part 2). However, in actual practice, there were hundreds of reform programs in China, which led to regional pension level comparison, difficulties in central government’s management and control, difficulties in the movement of workers across regions, and other issues. In order to solve the coexistence of various schemes for pension insurance, the State Council promulgated the Decision on Establishing a Unified Basic Endowment Insurance System for Enterprise Employees in 1997, which marked the formal establishment of the pension insurance system featuring the combination of social pooling account with individual account.In addition, the State Council issued the Decisions on Establishing a Basic Medical Insurance System for Urban Employees in 1998, marking the final establishment of the medical insurance system combining social pooling accounts with individual accounts.③Ministry of Human Resources and Social Security. Bulletin on the development of labor and social security in 1999. Retrieved from http: //wi.mohrss.gov.cn/gb/zwxx/2005-12/14/content_99523. Htm.It should be recognized that the combination of social pooling accounts with individual accounts is an innovation of the modern enterprise pension system in China. Moreover, from the perspective of its institutional structure, arrangement and operation,it not only draws on experience and lessons of Sweden and other developed countries in Europe and America, but also incorporates some experience of Singapore’s central provident fund model and the Chilean model. It has more extensive institutional functions by combining the responsibilities of the state and individuals and linking personal responsibility with social mutual aid.

In terms of the latter, China started its large-scale foreign trade reform from the end of 1993 till China’s accession to the WTO in 2001. The reform brought about new economic and social changes and challenges in China. Since 1993, the total number of laid-off workers in cities across China has reached 50 million. It is a huge social project to help such a large number of laid-off workers of state-owned enterprises to find new means of livelihood. The government has spent a huge amount of money and made great efforts to mitigate the impact of unemployment on such workers①Appleton et al., 2002. In the same year,the unemployment insurance system②In 1993, the State Council promulgated the Regulations on the Unemployment Insurance of State-owned Enterprise Workers, and at the same time abolished the Provisional Regulations on the Unemployment Insurance of State-owned Enterprise Workers.was adjusted but it was still unable to meet the requirements for the development of the modern market economy. In 1997, unemployment peaked in China. In response to this severe social challenge, the State Council promulgated the Regulations on Unemployment Insurance and issued the Regulations on the Minimum Living Guarantee for Urban Residents to establish a double-guarantee system for the unemployed under the new situation. In addition, to meet the needs for the development of world trade integration and the resulting changes, the coverage of pension insurance was extended to foreigninvested enterprises, private urban enterprises,and urban self-employed businesses in 1999. Pilot projects for new-type rural pension insurance have been carried out③Farmers were not enthusiastic about the rural pension insurance system which was launched in 1992. The system had been basically stagnant since 1999. However,rural pension insurance is an unavoidable issue in the process of modernization. Under this background, pilot projects for a new type of rural pension insurance have been initiated throughout China. In June 2008, the State Council convened a meeting and decided to launch pilot projects of a new rural pension insurance program in 10% of the counties (cities and districts) across the country in 2009.to promote the formation of a unified national labor market and to establish the model of combining social pooling accounts with individual accounts and the system of tripartite cost sharing.

3. Challenges and development of China’s social security internationalization from 2001 to 2011

Kuznets pointed out that globalization “is not only in the economic field, but also involves social institutions and ideology. All of them require certain structural changes. Modern economic growth will not be realized without them”④Kuznets, 1971, p.348. Hollis Chenery supported this notion and developed globalization as “a set of interrelated structural changes necessary for sustainable growth”⑤Abramowitz, 1983, p.85. In the decade from 2001 to 2011, China grew rapidly into the global industrial production center and had almost the largest consumer market in the world.While making great achievements, China is also facing severe challenges⑥Lin, 2012, p.2. If China is considered to have applied international practice to exploring its own social security system in the last stage, in this stage, it has started to explore bilateral, multilateral and regional integration of its social security system by continuing to study and reinforce China’s social security rationality.

3.1 Deepening the reform of China’s social security system with the essence of international experience

In terms of deepening the social security system reform during this period, in the face of the challenges of internationalization, efforts were continuously made to draw on the approaches adopted by developed countries to reform their existing social security systems, namely, the multi-pillar institutional framework①In 1998, US President Bill Clinton and British Prime Minister Tony Blair issued a joint statement in the United States, in which they openly “supported mandatory pension savings”, arguing that “the system of combining state funds with private funds to solve the pension problem is worth promoting.” The World Bank subsequently launched the “Three Pillar” and “Five Pillar” pension schemes. Although different countries have different methods of division, they always separate the basic guarantees borne by the state from the supplementary guarantees borne by employers or employees, forming a structure with multiple overlapping or multi-pillar support.and the marketization of resource allocation and investment operations②Tong, 2013; Sun, 2001.

First, it was the social security reform that matched China’s role as a large world factory. In 2004, as the “world’s factory,” China’s industrial output was a very high proportion of its gross domestic product (GDP), with manufacturing accounted for 75% of the industry. Changes in the employment structure and the formation of a unified national labor market required the establishment of a more active social security system as well as incentives for the release of the labor force and protection of labor reserves. In terms of the former, the Ministry of Labor and Social Security issued the Trial Measures for Enterprise Annuity and the Trial Measures for the Management of Enterprise Annuity Funds in 2004, specifying that the enterprise annuity system was the second pillar of pension security, and positioning it as a trust-based DC③The DC scheme refers to the retirement plan in which a pension insurance account is opened by the enterprise. The enterprise or the enterprise and the employee regularly pay the premium for pension insurance based on a certain percentage. The amount of pension that the employee receives upon retirement depends on the accumulative amount of the individual account (including return on investment).scheme. As far as the latter was concerned, a new rural cooperative medical service was launched, and the Regulations on Work-related Injury Insurance was promulgated in 2003. In 2007, a pilot program for basic medical insurance for urban residents was launched and a minimum living security system for rural residents was established. In 2008, a pilot program for workrelated injury rehabilitation was initiated.④Ministry of Human Resources and Social Security. Annual Bulletin on the Development of Labor and Social Security. Retrieved from http://wl.mohrss.gov.cn/gb/zwxx/node_5436. htm.

Second was the challenge brought by labor market upgrading under the flying geese pattern of development. After China’s accession to the WTO, the international community had different views on China’s employment prospects. One side was the group of optimists, who believed that with the GDP growth, China would see 12 million more jobs each year. The other side was the group of pessimists, who believed that the opening up of protected agricultural products would increase the number of the unemployed by 11 million⑤Deng, 2000.In fact, globalization mainly affected the change of labor market patterns through the changes in the international model of labor division and in the industrial structure⑥Mishra, 2007, p.28. Some scholars called it the flying geese pattern⑦Kaname Akamatsu published a pioneering paper in 1932, in which the “flying geese paradigm” was mentioned for the first time. The flying geese paradigm means geese fly in a V formation; Akamatsu, 1962. On the one hand,the upgrading of the level and complexity of the manufacturing industry set higher requirements for high-caliber talents, on the other hand, it expelled a large number of low-end and surplus workers.⑧In the process of world economic development, there is a time series of industrial and employment structure substitution among countries of different growth stages, which Akamatsu refers to as a flying geese model. After sifting through the 2011 data of the United Nations Statistics Division, Lin Yifu found that China’s industrial structure began to upgrade to a higher level in 2008, which led to the transformation and upgrading of the Chinese labor market.The year of 2009 was the turning point of change. Due to the paradox of labor shortage under the background of labor surplus, the number of unemployed people increased and distributive conflicts intensified promoting the further improvement of unemployment insurance and the minimum living security system in China①Wang, 2000. At last, it was the market-oriented operation of social security funds. In 2000, the China Social Security Fund was established. In the meantime, the National Council for Social Security Fund was founded for funds management, investment and operation.

unemployment

3.2 Multilateral integration based on equality and mutual benefit

Since China’s reform and opening up,international elements have been continuously integrated into China’s social security system, but the openness of the system to the outside world had not been enough. During this period, although bilateral agreements on social security were signed with some countries, there was still a long way to go before bilateral or multilateral relations on social security got smooth. However, the requirement of economic integration for adjusting the openness of China’s social security system was very urgent and realistic. This was because an open social security system would not only be the result of economic opening up, but also would play a role in promoting and protecting such an opening up. With the global flow of capital, the labour force would also flow across countries. This would inevitably lead to the internationalization of social security issues such as old-age care, medical care, unemployment, and occupational injury. After its accession to the WTO,China needed to abide by international practice,comply with multilateral agreements, and protect social security rights of its exported labor while fulfilling its commitment to social security benefits for foreign workers.

4. A period of social security internationalization with Chinese contributions from 2012 to 2018

After the end of the Cold War, US scholar Francis Fukuyama put forward a famous notion,i.e. the “End of History.”①The “End of History” notion held that the disintegration of the Soviet Union marked the end of communism and that the development of history can only take the path of the Western market economy and democratic politics. He proposed that the history of human society development is a universal human history that orients toward a liberal and democratic system. The liberal democracy is the end point and the final form of government in the development of human ideology. From then on, the fundamental principles and systems that constitute history would no longer be progressive.With the rise of China’s economy, even Fukuyama himself openly admitted that the notion needed further elaboration and improvement, and western liberal democracy was not the end of human evolution. The global financial crisis, which began in 2008, declared the decline of neo-liberalism which was once quite prevalent. The root cause of the decline lies in the fact that neoliberalism, represented by the United States, cannot solve the contradiction between socialization or globalization of production and private possession of production resources or factors under the background of economic globalization②Chen, 2010, p.115. At the same time, the internationalization of the Chinese Yuan, the establishment of the Asian Infrastructure Investment Bank, and the proposal of the Belt and Road Initiative demonstrated that China had transformed itself from a globalization pursuer a decade ago to a participant in establishing the international economic order, with an international status and influence matching its role as an economic giant Some scholars even claimed that the 21st century is China’s century③Pan & Ma, 2009. As a result, new changes have taken place in the dominant trend of globalization. In the face of global change because of China’s rise, some Western scholars raked up the“Kindleberger Trap” and claimed that emerging leading countries could not provide necessary global public goods, thus creating a leadership vacuum in world governance and leading to world disorder④Kindleberger, 1986; Gilpin, 1989.So does China have the capacity to cope with the resulting political, social and cultural structural changes while taking the lead in economic development? Different from the traditional leader’s strategy of stabilizing governance order, China puts forward the strategic framework of building a community with a shared future for mankind,which regards the relationship network composed of various countries across the world as the starting point and destination for the great powers to pursue their interests.

In the meantime, the dominant logic of social security internationalization began to change.It means that internationalization of social security should be realized through a two-way interactive process of mutual appreciation and learning from other countries instead of a oneway approach of learning from or imitating them during the country’s development. Only this kind of internationalization transforming from being passive to being active can be sound and sustainable. Since the 18th National Congress of the CPC in 2012, General Secretary Xi Jinping has made a major strategic plan for deepening China’s reform and opening up. He has further defined the development orientation of socialism with Chinese characteristics, the historical position of the present stage and the role of China in the future course of world history. The proposal of a community with a shared future for mankind closely links the Chinese Dream of bringing about a better life for its people and national rejuvenation with the dream of winwin development for all countries in the world.

During this period, the CPC Central Committee takes the improvement in the modernization of the national governance system and the capacity of national governance as the institutional guarantee for the deepening of China’s reform and opening up. As far as social security reform is concerned,significant achievements have been made in the following aspects. The first aspect is reflected in breaking down the interest barrier that restricts the social security system reform, realizing the integration of social security systems, opening up the channels between different regions, groups and systems, and rationally upgrading the overall level of social security. The second aspect is reflected in enhancing significantly the level of social security transfer payments. The third aspect is reflected in accelerating the expansion of social security transfer payment coverage. The fourth aspect is reflected in considerably improving social security service capabilities.

The series of major achievements highlight the success of China’s approach and the charm of Oriental political civilization and demonstrate a country type and national capabilities different from those of the West. General Secretary Xi Jinping pointed out that “Only CPC and China can make it in the world, which fully demonstrates our political and institutional advantages” in summing up and promoting the cooperation for poverty alleviation between eastern and western China.In this modernization development plan which is written by the practice of socialism with Chinese characteristics and which is different from that of the West, it can be concluded that: (1) A peopleoriented approach is always the driving force for political development. Historical materialism holds that people are the subjects of history and the decisive force to promote social development and progress. General Secretary Xi Jinping stresses that people are the creators of history and the fundamental force determining the future and destiny of a political party and country. (2)The importance lies in the political development capacity to incorporate and include. Based on changes in the major social contradictions during different periods and the trend of diversified and complex development in society, it is important to incorporate and include these factors into the political power system to resolve the contradictions of binary opposition between state and society. (3)A political development strategy has been adopted to mobilize extensive participation of the society.With the government as the guiding factor, efforts have been made to develop a diversified social security governance structure through coordination among government, society and the market to form a social security governance system that involves the participation of different regions, departments,organizations, and people throughout society.

China, as the world’s largest developing country,has made achievements and obtained experience in the development of its social security undertaking.It has overcome the disadvantages of traditional modernization development and provided another option for the development of other countries around the world in the new era..