Authorities in Beijing on Wednesday announced a 9.7 billion yuan (US$1.4 billion) social insurance package, expected to help local firms and individuals cope with the current global financial crisis.

Social insurance payment rates will be reduced for both enterprises as well as individuals in the city, easing their burden by about 5 billion yuan, Zhang Xinping, chief of the Beijing municipal labor and social security bureau, said.

At the same time, the city will invest an added 4.7 billion yuan in the social security fund," he said.

By helping enterprises get through these hard times, the city will respond better to the crisis, he said.

Starting January, the unemployment insurance rate for businesses will be reduced from 1.5 percent to 0.5 percent, and from 1 percent to 0.2 percent for individuals, it was announced.

While further announcing a cut in the work injury insurance rate from 0.59 percent to 0.48 percent, Zhang said similar adjustments will also be made in migrant workers' medical insurance and the minimum level of endowment insurance in Beijing.

"These policies will benefit all enterprises based in Beijing as well as their employees," he told reporters at a press briefing.

Chen Lu, director of the labor and salary department of the Shougang Group, said the policies will help 67,000 of the company's employees who pay their insurance in the capital.

"We are going to save 30 million yuan, which is a third of the total insurance fees for this year," he said.

"The new measures will help the company hire more staff, without cutting salaries," Chen added.

Beijing is now leading the country in establishing a social insurance system that aims to cover all its residents.

"Endowment insurance, for example, has covered more than 10 million Beijing citizens, 84 percent of the 12.2 million registered population, compared with merely 200 million of the country's total 1.3 billion," he said.

Yang Yong, vice-director of the social security department of the Beijing municipal finance bureau, said it spent nearly 30 billion yuan - 18 percent of total finance expenditure on the sector - last year.

"This year the total investment is expected to be 34 billion yuan."

(China Daily December 25, 2008)