CCTV9英语新闻：Shanghai lowers social security premiums to stimulate economy

The Shanghai government has announced it will reduce social security premiums for companies by 2.5 percentage points. The move is aimed at helping businesses save money while stimulating the economy.

 

The city will slash the premiums for mandatory pension by 1 percentage point, medical insurance by 1 percentage point and unemployment insurance by 0.5 percentage point. Despite the reductions, the city government will still offer the same level of social security benefits.

 

City officials say the move is expected to save businesses about 13.5 billion yuan this year.

 

"The revenue and expenditure of social security premiums in Shanghai are balanced, and also we have a surplus of more than 200 billion yuan. After the rate cuts, we can save companies 13.5 billion yuan this year. But we still expect a surplus this year. We think the city's social security fund is safe and sustainable," Shanghai vice mayor Shi Guanghui said.

 

Shanghai is the seventh region to launch such reductions. Guangdong, Yunnan, Gansu, Guizhou and Jiangsu provinces along with Tianjin municipality have also reduced the social security premiums companies have to pay on behalf of employees in a drive to boost the economy.

 

"These measures can enhance the economic development and promote the transformation of growth patterns. With lower employment costs, these companies can create more job opportunities. And yet employees can make higher salaries and still receive welfare. In addition, more staff training can be set up to increase work efficiency. It also lets companies put more emphasis on product research and development strategy," Hou Jun, senior manager of CIIC Shanghai HR, said.

 

The move comes in response to a general cry from government officials and scholars to help businesses as Chinese employers are reportedly burdened with one of the highest social security obligations in the world.

 

Pension fund, medical insurance and housing provident fund contribution make up 44% of the total compensation owed to an employee.