_yanglao baoxian_ )<sup>14</sup> was initiated under the supervision of the Ministry of Civil Affairs, and aimed to develop an institutional framework for administering a pension scheme based on voluntary contribution, defined-contribution, and fully-funded individual accounts (Shi 2006). In 1991, the Ministry launched successful pilot programs in five counties within Weihai and Yantai municipalities in Shandong Province (Leisering et al. 2002). These programs did not provide a complete social safety net, but allowed individuals to contribute to the pension scheme with taxexempt earnings, and supplemented these contributions with subsidies from employers and local communities. Subsequent programs incorporated the results of these early pilot programs. In 2006, a three-year pilot was launched in eight counties/ districts (funded largely from individual and local contributions), with the aim to increase the rural pension participation rate to 60 percent nationwide by 2020 (World Bank 2008:76-77).<sup>15</sup> It will, however, be some time before evaluations become available to indicate the actual reach and impact of these programs.

In sum, the social assistance programs have been weak through much of this decade. These programs have covered a low percentage of the population, varied little in coverage between richer and poorer regions, and offered significantly lower average benefits per capita in the poorer regions than in the richer ones (Table 3). And social insurance programs have catered primarily to the urban areas, and to the better-off there. Fortunately, the coverage of the social assistance programs has been sharply increased, and plans are underway for expanding coverage of the social insurance programs.

The implications for the rural elderly are not reassuring. They have had little access to social assistance, pensions and other forms of social insurance, and have depended heavily on their own labor income and family support, in the form of transfers or support through coresidence (Table 4). The need for family support rises sharply as they age since their labor income falls and safety nets remain a trivial source of food or income security. Unfortunately, the surveys used in the study of the incomes of China’s rural elderly (Cai et al 2009) did not ask about dependence on one’s own savings in old age. Other data indicate that rural households have high savings rates on average, which enables families to cope with risks and support their elderly (World Bank 2009: Table 2.15). However, these data also show that those below the poverty line are unable to save. The poor also receive fewer transfers than others (ADB 2004:40). This suggests that the poor elderly are unlikely to be able to draw on savings or transfers for significant support.

areas. Access to any old age security program is further limited by the extremely rigid urban/rural hukou registration that largely prevents rural residents from re-registering as urban residents.

14 Occasionally translated as “endowment insurance” or “social insurance.” Many Western scholars refer to the program as a “pension,” which more or less accurately describes the design of the program. Some have hypothesized that the use of the term “insurance” represents a conscious choice to avoid the word “pension,” and there are reports of some villages intentionally promoting these “insurance” programs to tempt pensioners into believing that they there is a larger element of government protection involved than is in fact the case (see Leisering et al. 2002).

15 The World Bank (personal communication from a report under preparation) says that efforts to increase rural pension coverage are being intensified. During much of the past decade, the rural pension system covered around 11 percent of the rural labor force, mostly in a few coastal provinces. In September 2009, the State Council issued a policy guidance document for a new rural pension scheme on a nationwide basis. The most novel feature of the scheme is the major role of central government financing of a basic pension. This scheme is being piloted in 2010, and aims to achieve full coverage by 2015.

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