What’s new: The Chinese government cut company contributions to social insurance funds by 1.54 trillion yuan ($238.2 billion) last year, which helped businesses offset fallout from the Covid-19 pandemic and stabilize employment, Minister of Human Resources and Social Security Zhang Jinan said at a briefing (link in Chinese) on Friday.
Firms put 1.33 trillion yuan less into staff pension funds in 2020, Zhang said. He said that the reductions had an impact on the pension system as some provincial-level regions saw additional pressure to pay out pensions.
What’s the context: Last year, the government temporarily exempted or cut (link in Chinese) firms’ contributions to employee pension, unemployment and work injury compensation insurance funds as businesses were hit hard by the pandemic.
Zhang said that pensions would be paid to retired people in full and on time, citing sufficient coffers, government subsidies and pension fund investment returns.
Related: In Depth: China’s Local Governments Find It Hard to Make Ends Meet
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and Heather Mowbray (heathermowbray@caixin.com)
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