Suggestions for China's Social Insurance Fund
------Mark Jiang

As China's social insurance system is somewhat underdeveloped, many citizens have suggestions as to how it could be made better. Peoples' opinions always differ, and on this subject they range from complete elimination to plans to add increasingly complex layers of bureaucracy. As for myself, I prefer plans that are somewhat more middle of the road, yet simple enough to be practically carried out. My suggestions are as follows.

1. Legislation
The social insurance system is a large, complicated and systematic project, and yet its rules are applied somewhat unevenly. I propose reinforcing legislation and the creation of administrative regulations, regional administrative rules and by-laws for the purpose of correcting these inequities. While these measures are being legislatively, I would suggest that it be required that the regional administrative regulations should be made in tandem, so that the effectiveness goes to all levels.

2. Bond Offering
In view of the current situation of the social insurance system of our country, it is my opinion that it would be advisable to issue several special bonds for the purpose of strengthening the funds.

3. Expert Management - Potential Good Results and Frees up Governmental Resources
As stated above, social insurance funds can be strengthened through the issuance of bonds to the market. Such strength can be gained with the help of professional investors. As an example, AIG, the parent company of AIA, has gained great reward by investing in some important infrastructure construction projects in Shanghai. Moreover, utilizing professional, private sector management teams can also free up governmental resources. The government would only be responsible for the supervision, while the management would be operated by the professional investment companies.

4. Public-Private Supervision
Enhancing the ability of the insured to supervise over the social insurance fund would help provide some checks and balances as to how the funds are being managed. The supervision of the insured will not be realized until the social insurance department discloses information about the personal funds.