Fifteen provincial-level regions have unveiled their programs to cut social security, the 21st Century Business Herald reports on Thursday.
The website said that so far Shanxi, Jiangxi, Henan, Chongqing, Sichuan, Tianjin, Shannxi, Hubei, Qinghai, Xinjiang, Guangxi, Anhui, Beijing, Shanghai and Shandong, have made their social security cuts public.
Among them, except for Shannxi and Qinghai, the remaining 13 regions announced they were lowering contribution rates that enterprises must pay for pension insurance for the first time, while the other 13 regions, excluding Shanghai and Shandong, said that the cut will be conducted step by step and will last for two years.
According to a routine government meeting on April 13, the required contribution rates of pension insurance, unemployment insurance and housing provident funds will be lowered in a two-year period starting May 1.
Under the policy, enterprises that contribute more than 20 percent of the pension insurance payment can reduce the rate to 20 percent, while those in provinces that see sufficient funds can lower the rate to 19 percent.
The newspaper said a total of 21 provincial-level regions meet the requirements. Over the past month, 11 regions, including Shanxi, Jiangxi, Henan, Chongqing, Sichuan, Tianjin, Hubei, Anhui, Beijing, Guangxi and Xinjiang, announced they were lowering the rate that enterprises must pay for pension insurance to 19 percent in a two-year period starting May 1.
Guangxi saw the biggest drop in lowering the percentage of pension insurance. According to the document, the required contribution rates for enterprises in Guangxi's 29 key industrial parks will be cut from 20 percent to 14 percent, while for enterprises in 84 industrial parks, the rate will be reduced from 20 percent to 16 percent.
The new policy's biggest effect is to relieve the burden on businesses. The Ministry of Human Resources and Social Security estimated it will save businesses 38.6 billion yuan a year, if the measures are put in place.
