Unification of the Chinese Pension System
Authors:   , Stepan Matthias 
Published: October 2023

This book provides an answer to the puzzle of how the Chinese pension system was unified against the odds of high levels of institutionalization of regional and sectoral pension schemes, strong vested interests in state-owned enterprises, and opposition of local governments. It opens the black box of policymaking in China and offers unique insights into the country’s pension politics. Unification was the result of experimentation-based policymaking, not strongman politics.

In the period from 1991 to 2013, old-age income arrangements for different groups of the Chinese population underwent major transformation. The Chinese Communist Party (CCP) and respective state organs launched several reform initiatives that cumulatively resulted in a complete overhaul of the existing principles and structures in the provision of old-age income. In 1991, only urban employees in the public sector could expect a guaranteed income in old age. By 2013, nearly all Chinese citizens irrespective of their profession or household registration status (户口 “hukou” ) were covered under public pension schemes. The Chinese state greatly extended its funding commitment. Private, commercial retirement plans remain the exception.

The theoretical framework was inspired by scholarship that explores the role of mechanisms in different context situations (Falleti & Lynch, 2009; Mayntz, 2004), and the adaptation of the logic behind path dependency to explain for institutional change in the absence of a major crisis moment. Scholars working on this subject do focus on endogenous change as an alternative point of departure for transformative change (Ebbinghaus, 2005; Hemerijck, 2013; Streeck & Thelen, 2005).

To allow for an in-depth study of the process and mechanisms, I chose a case study research design. Process tracing in this research is guided by a framework used for policy analysis and process reconstruction. I adapted Actor-Centered Institutionalism (ACI) developed by Mayntz and Scharpf (1995) for the context of the People’s Republic of China. The framework supported the systematic search for relevant actors, institutions, ideas, and finally mechanisms. To make the reform process traceable despite this high level of complexity, I studied the change of old-age income arrangements for three different macro groups of the Chinese population individually: urbanites working in urban enterprises (Chapter 4), rural workers (Chapter 5), and rural-to-urban migrants (Chapter 6).

The reconstruction of the policy process is based upon a detailed search for available documentation on local experiments, laws, but also speeches or written comments of political leaders or policy advisors. Next to the identification and analysis of key documents, expert interviewing was one of the key data collection methods. In total, I conducted 42 expert interviews, with more than 50 individuals. Interviewees were both Chinese and non- Chinese nationals with different professional backgrounds and positions.

Path dependency played a key role in the transformation process of old-age income arrangements for different groups. Updating orientations, knowledge, and capabilities of actors, broadly captured in the mechanism of learning are documented. Bureaucrats took the lessons from international models (e.g., Japanese rural pension model – Chapter 5), and domestic experiments (e.g., Guangdong model to include migrant workers in existing pension schemes – Chapter 6).

The results of this research project provide the basis for comparison with observations of policy changes in other policy fields in China, or the evolution of the experimentalist policymaking in China over time.