The State Council, China's cabinet, has decided¹ to further cut employers' social security contributions.

 

中国国务院决定进一步削减企业雇主的社保费率。

 

The decision was made at a meeting headed by Chinese Premier² Li Keqiang on April 13. The decision is expected to reduce enterprises' burdens by over 100 billion yuan, or around 15.4 billion US dollars.

 

According to the decision, the enterprises' contributions to pensions insurance, which account for the largest proportion of social security expenditure³, will be set at 20%, or 19% in some cases, within two years beginning May 1. Some local governments in China have already set the employers' contribution rate around 20%. 

 

The total unemployment insurance contribution rate will be further reduced to between 1 and 1.5%.

 

Enterprises' contribution to housing provident⁴ fund will also be lowered. Underperforming enterprises can apply to postpone⁵ their payments.

 

Professor Zheng Bingwen with the Chinese Academy of Social Sciences remained optimistic about individual income levels here in China.

 

He said the State Council's decision was aimed at relieving the burdens of enterprises and increase people's incomes, adding that there is no need to worry about falling personal incomes.

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