China's central government has required local governments to set up a joint mechanism concerning social security and prices as soon as possible to raise basic pension, unemployment insurance and minimum wage, Xinhua News Agency reported.

Jin Weigang, vice Director of Social Security Institute, pointed out that basic pension, unemployment insurance and minimum wage are the minimum living allowance for urban seniors, the jobless and low-income employees. Price hikes will cause inflation and lower the real purchasing power, greatly affecting people's lives, especially the vulnerable groups.

Thus, it is crucial to balance prices and social security and establish a joint mechanism. Based on the actual conditions of rising prices and inflation, the local governments must raise basic pension, unemployment insurance and minimum wage appropriately, added Jin.

Su Hainan, Vice-President of the China Association of Labor Studies, said many local governments do adjust social security standards, but over a fixed period. The State Council timely proposed a quick-response, long-term mechanism to ensure basic living conditions for vulnerable groups when prices surge.

Shandong, Jiangsu and Zhenjiang provinces have taken the lead in setting up such a joint mechanism.

(CRIENGLISH.com November 20, 2010)