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New Urban Poverty and the Minimum Living Standard Guarantee Scheme in China

Cho, HeungSeek 1,  Byung-Cheol Kim 2

1서울대학교
2中國人民大學

Candidate

ABSTRACT

This article will review the process of massive unemployment in urban area, its impact on the livelihoods of urban unemployed and the changes in social policy since the introduction of economic reform. Since economic reform launched in the late 1970s, China started economic reform in rural area and expanded the reform into urban area. The central focus of China's economic reform in urban area lies in restructuring its urban state and collective enterprises. In particular, there has been the government's radical approach to lay-off a lot of workers in the urban state and collective enterprises and this process of China's distinctive lay-offs policy has given rise to massive unemployment. Although the Chinese government carried out a series of policies for the urban unemployed such as the establishment of the Re-employment Service Centers(RSCs) and unemployment benefits, the unemployed tend to get poorer due to the limitations of related policies. Unlike the 'Three-Nos', the traditional legitimate recipients of state support in a centrally planned economy, the newly unemployed who fall outside the formal social assistance system has become the newly urban poverty-stricken population. The Chinese government introduced the Minimum Living Standard Guarantee (MLSG) scheme that was firstly introduced in Shanghai in 1993 as a final safety net for the unemployed and the scheme was gradually extended into the rest of the country. Thus, the distinctive feature of Chinese MLSG scheme in urban area since economic reform is the establishment of minimized public assistance policy system acting as a final safety net, which highlights the elimination of social unrest due to massive unemployment and the provision of social relief to the newly poor in urban area.

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