1. Eastday: Can you explain the rationale behind Shanghai implementing the policy whereby incumbent employees who joined the work force before the end of 1992 can have their length of service prior to the end of that year 'capitalized' in their personal endowment insurance accounts? Can you explain this?

Jiao Yang: What you are referring to is that, two days ago, the Standing Committee of the Shanghai People's Congress approved an important policy which is of importance to local residents. All of you must have read the relevant reports, but these reports may have been too simplistic, hence your question. It is a complex issue and needs to be explained so that all citizens can have a better understanding of the policy.

In implementing the policy we are following the State Council's requirement to improve personal endowment insurance accounts, the first requirement being to have the accounts properly recorded to pave the way for the establishment of a new mode of managing both social and personal endowment insurance funds. The policy will make the personal accounts clear and complete so that it is possible for citizens to better-protect their own rights.

In Northeast China, the State Council has improved the endowment insurance system on a trial basis by focusing on improving personal endowment insurance accounts. During the trial period, the State Council required that social and personal endowment insurance funds be managed separately. The requirement was also put forward in this year's work report of the State Council. Therefore, we adopted the policy to follow the requirement of the State Council and to make citizens' personal endowment insurance accounts clear and complete so that residents can better protect their rights. Briefly, two sentences can explain the reasoning for this: firstly, to fulfill the State Council's requirement to improve personal accounts; secondly, to protect the rights of citizens.

As Shanghai adopted reforms to the endowment insurance system by establishing personal endowment insurance accounts for local workers in 1993, employees can only see length of service recorded in their personal accounts before the end of 1992.

According to the new policy, incumbent employees who joined the work force prior to that time can have their length of service before the end of 1992 capitalized in their personal endowment insurance accounts as a lump sum in accordance with the exising company-based calculation rules for endowment insurance, and the resulting amount will be combined with the actual funds they have paid into their accounts post-1993 so as to form a complete personal account. 

2. Shanghai Morning Post: After the report of 'capitalizing' the length of service into a person's pension account was released, people were concerned about the implementation and the scope of the plan. Please give a brief explanation about it.

Jiao Yang: First of all, I'd like to identify the people who are covered. In 1992, I mentioned that it was a significant turning point in the policy. The policy covers those who had started work by the end of 1992, who are still participating in the endowment insurance program, and who are not yet retired. These are the three basic categories. People who started work after Jan. 1, 1993 are not covered, nor are the retired.

In terms of the implementation, you should have noticed that Saturday's report stated that the decision made by the standing committee of the Shanghai People's Congress put emphasis on a "careful and thorough" implementation, and that the relevant government departments and the labor, together with social security administration, are making arrangements for the implementation. The handbooks and notices regarding this issue should reach every family in the city by November via the community, neighborhood committees or by mail. The handbook will cover in detail what we'll do to keep the personal endowment insurance account complete. It will help people understand our work. The notice  informs those who are covered by the policy how much money is 'capitalized' into his personal account.

3. Shanghai Radio Station 990 News Channel: People are very much concerned about the endowment insurance. I'd like to ask something about the policy of "creating a social security fund and a personal account, and managing them seperately." What does it mean exactly? We've received numerous phone calls asking this recently. Thank you.

Jiao Yang: "Creating a social security fund and a personal account, and managing them separately" is a technical term. Here is an additional explanation of the wording. In the report, we call it "managing them separately," but do not "separate them." After the 16th session of the National Congress of the CPC, the central committee of the Party and the State Council have repeatedly stressed the establishment of a social security system that should develop according to the economy. At the end of 2000, the State Council chose Jiaoning Province for the pilot program to reform the endowment insurance system in townships and cities, focusing on creating a real name personal account system. The idea of insisting on a basic endowment insurance policy that combines social pool and personal account into its reform plan is also included. And for the first time, the idea of "creating a social security fund and a personal account, and managing them separately" was raised. The first two characters of the term refer to the social security fund and the personal account respectively. The last two indicate their separate management, and what you see is an abbreviation of the whole meaning. At the end of last year, the reform was widened to Heilongjiang Province and Jilin Province. The State Council raised the tasks of "perfecting the basic endowment insurance system for the enterprise employees," and "widening the personal account pilot program sites" in its work report this year. Therefore, we'll actively promote our work on the creation of the personal accounts, the core of the endowment insurance reform program.

4. Xinmin Evening News: My question is about the medical aid program.  Currently, what categories of people are eligible for the program, and how many people will benefit from the new policy?  Also, the spokesperson said in the briefing that a "one-style" service will be established.  Could you please explain this? How does it differ from a "one-stop" service?

Jiao Yang: Medical aid used to benefit the seriously ill  whose families were on or below the poverty line.  But now, the object is to assist particular groups, especially single seniors, orphans, disabled singles (mainly children) and seriously disabled people, with a total number of nearly 2,000 people.

As for the number of beneficiaries of the new policy, the civil affairs bureau has conducted thorough research while drafting the policies so as to broaden the scope of benefits.  Based on the survey, it has estimated that the number of actual beneficiaries will increase about 10,000 from last year's 34,000.

Now let me deliberate on the definitions of "one-stop" and "one-style" services.  We used to follow the concept of "one-stop" service, by which the government departments of industrial and commercial administration, taxation, public security and related services set up counters under the same roof so that citizens could be served at these counters one by one.  For their convenience, citizens didn't have to trudge through the streets to the various departments or ask around for information.
The "one-style" service is more advanced than this one.  I don't know whether reporters have been to community service centers in some districts, where this "one-style" service is provided.  At these centers, a window, a desk or a counter is set up to receive enquiries from citizens and pass them on to relevant government departments to process.  Departments at the back-office cooperate to form a strong service platform while the reception center acts like a window for citizens and is more convenient for them.
I remember at the last press conference saying that the reception work should be soft with good service to soothe citizens and warmly record their requests, while the back-office departments should be hard and unrelenting with their commitment to service, with all the departments varying from industrial and commercial to taxation, civil affairs and public security cooperating with each other and fulfilling their responsibilities. 
This is the way forward in reforming government functions, strengthening public services and enhancing social administration.

5. Real Estate Times:  Zhabei District is arranging home leases for relocated families and the first group of eight families has already been processed.  In the previous press conference, you said the scope of the program will be expanded at "the right time".  My question is what time is "the right time" to expand it?

Jiao Yang: We are currently studying the issue and related departments are at the stage of conducting trials and explorations.  The right time for expansion will be when the conditions are ripe to do so.  Thank you.

6. Oriental Morning Post: My question is also about the medical aid program.  Have you even investigated the ability of the beneficiaries of this aid program to afford medical costs?  The result of the survey is essential to our report.

Jiao Yang: According to the official statistics in recent years, about five percent of needy persons in this program were suffering from serious or incurable diseases, or would spend over 30 000 yuan (US$3627.57) per year in the hospital.  However, under the current policy, the accumulative total medical subsidy for one person per year is not more than 5 000 yuan.  So persons whose real medical cost exceeds 30 000 yuan will suffer from financial difficulties.  At one time, seriously ill persons from families on or below the poverty line--especially those who were not privileged to have medical insurance--were surely thrown into severe poverty.
Therefore, the new medical aid policy allows more people to receive subsidies and prevents more from suffering financial difficulties from medical costs.

7. Business Week: My question is still concerning the conversion between the length of service and the personal endowment insurance amount of an incumbent employee who joined the work force before the end of 1992.
As you explained just now, how will this policy be introduced and what's the calculation standard? (According to the new policy, incumbent employees who joined the work force prior to 1992 can have their length of service before the end of 1992 capitalized in their personal endowment insurance accounts as a lump sum in accordance with the existing company-based calculation rules for endowment insurance, and the resulting amount will be combined with the actual funds they have paid into their accounts post-1993 so as to form a complete personal account) 

Jiao Yang: It is another complex issue.  The point is the personal pension generated before the end of 1992.  The calculation standard of this new policy is the same as those former ones. 
In the past years, the real personal endowment insurance account was composed of two parts: subsidy generated in terms of the length of service before the end of 1992 and the sum transferred into the personal account from 1993 to 1997.
Under the new policy, the subsidy in the personal endowment insurance account will include these two parts.

8. Xinmin Afternoon Post: What is the breakthrough, or advantage, of this new medical aid policy, compared to the former one?

Jiao Yang: I have explained the advantages of the new policy, and now I'd like to generalize on them.
On the whole, there are two advantages:
* It broadens the scope of benefits.  Medical aid used to benefit the seriously ill whose families were on or below the poverty line.  But now, the object is to assist particular groups, especially those suffering from malignancy, undergoing dialysis for uremia and psychosis, whose average family income is below the poverty line by 150 percent.
* It increases the maximum subsidy standard from 5 000 yuan to 15 000 a year for one person.