China to reduce social insurance burden on employers


China released new social insurance policies in March, and foreshadowed others to come, which will reduce social insurance burdens on employers. The policies will:

Reduce pension contributions by employers. On 24 March 2019, the Ministry of Finance announced that starting from 1 May, China will reduce the employer contribution to pension insurance from 20% to 16%. The minister speaking on behalf of the Ministry of Finance further indicated that China would also at some point continue with the recent reductions in employer contributions to unemployment insurance and work injury insurance and would also provide more social insurance contribution subsidies to employers in labour-intensive industries.

Integrate maternity insurance and medical insurance. On 6 March, the State Council issued the Opinions on Promoting the Integration of Maternity Insurance and Medical Insurance, which took effect on the same date. According to the opinions and comments from the National Health Care Security Administration to clarify the opinions, maternity insurance and medical insurance will remain separate social insurances but will be paid together into one fund. The opinions directly state that the purpose of the insurance fund integration is to reduce the employer burden from making the contributions separately. Local governments are required to integrate the funds by the end of 2019.