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Up to 1.9 trillion yuan in social security fees to be cut

By LI LEI | China Daily | Updated: 2020-07-22 09:06
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Job seekers stop by a company booth at a career fair at Anhui University of Science and Technology in Huainan, Anhui province, on Tuesday. [Photo by Chen Bin/For China Daily]

It is estimated that China will exempt up to 1.9 trillion yuan ($271 billion) of social security fees this year, according to an employment official on Tuesday.

The announcement came after central authorities late last month decided to extend the cost-reducing policies-first introduced in February-through the year in a bid to salvage jobs in the wake of the COVID-19 outbreak on the Chinese mainland.

The Ministry of Human Resources and Social Security official, Nie Mingjun, said the fee cuts would be "unprecedented" in scale.

The cuts came mainly as discounted payments to pension funds as well as unemployment and work injury insurance, which are shared by employers and workers, he said.

The fees were reduced by half for large companies and eliminated for medium and small businesses, which offered about 80 percent of the nation's jobs and more than half of the tax revenue, according to the Ministry of Commerce.

"They will play a very positive role in lifting enterprises out of difficulties, stabilizing jobs and creating more job opportunities," said Nie, who oversees the pension funds, known in China as "old age insurance".

The cost cuts were introduced in February, at the height of the domestic COVID-19 outbreak, when factories, restaurants, hotels and shopping malls remained shuttered nationwide, threatening widespread job losses.

Figures offered by the ministry showed a total of 576 billion yuan worth of security fees were removed for businesses by the end of June. Additionally, the central authorities gave a nod to postponed payments worth 43.1 billion yuan over the period.

Before the epidemic, China had lowered the social security fee rate six times since 2015, saving employers about 1 trillion yuan in employment costs, according to official data.

The new round of cost cuts was part of a concerted effort by central authorities to protect jobs as China reopens its economy.

Zhang Ying, head of the ministry's job promotion department, said China would continue to subsidize enterprises that refrain from laying off workers and hire "key groups", including impoverished workers and college graduates, among others.

The ministry would work to expand employment at State-owned companies and the public sector. More opportunities would be made available for college graduates to further their studies. Sustained efforts would be made to help rural workers find urban jobs, she added.

To facilitate job-hunting among key groups, the ministry on Tuesday unveiled an online portal aimed at offering verified job information. Job agents and applicants can register at jobonline.cn.

The ministry on Tuesday also updated a quarterly ranking of the 100 most-wanted jobs, which was based on data offered by local employment authorities.

The latest ranking showed the top three posts in short supply were salesperson, package delivery person and restaurant servers.

The number of hot jobs on offer has reached 1.48 million, an 8.2 percent increase compared with the first quarter, the ministry said, adding it was a sign of a recovering economy.

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