Five Social Insurances and One Housing Fund

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Five Social Insurances and One Housing Fund

Table of Content

Chapter 1: Introduction 3

Chapter 2: Successful of Shanghai in "Five social insurances one housing fund" 4

Chapter 3: Impacts on Employer 5

Chapter 4: Impacts on Employee 6

Chapter 5: Precautions of Human Resources Management 7

Reference 8


"Five social insurances and one housing fund" was established under Labor Act Chapter 9 Article 73. It is used to serve the purpose on maintaining social harmony by protecting employee's benefits.

"Five social insurances" included endowment insurance, medical insurance, unemployment insurance, employment injury insurance and maternity insurance . "One f und" is referred to h ousing p rovident f und. Endowment,
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Employees are also required to make contribution to some of them. "A Taiwaness enterprise in Shanghai reported the Law has increased its labour cost on insurance participation by 50 percent",

Mr. MBA, "台商內憂外患 營運「陸」障多", 26 June 2012

which is mainly due to the extension of insurance coverage that leads to the rise in premium payment and related expenses. " In 2010, urban pension, medical, unemployment, occupational injury and maternity insurance altogether recorded a person-time of 1.108 billion, 84 million more than that of 2009. The total income and expenditure of the National Social Insurance Fund reached RMB1.86 trillion and RMB1.48 trillion, increased by15.7% and 20.4% respectively when compared with those of 2009."

Professor Wang Yanzhong, Director, Labour and Socail Security Research Centre Chinese Academy of Social Science, "Prospects and Impacts of Social Insurance Law Implementation", Road to China, Spring 2011

A significant part of the increased expenses came from the upsurge of enterprises' expenses which lowered competitiveness of enterprises as most of the capital resource would constitute the main part of the payment system. Also, there were rise in the labour cost of enterprises, especially in those labour-intensive ones, and thus employers may force to lay off workers or cut wages in order to keep the company alive.

However, in the long
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