The Open Method Of Coordination As A Device To Design An Integrative Pension System For China

The ultimate goal of the development of human society is to maximize the welfare for the whole members on the basis of the continuity of material civilization and the inheritance of spiritual civilization.A sound pension system is an important carrier for the members of society to obtain social welfare,which is also the cornerstone of the development of modern society.China's current pension system is still a network structure with a situation of fragmentation.Firstly,different provinces have different pension standards,and even in the same province,different cities have different pension standards as well;secondly,there is a prominent urban-rural division,most urban elderly relies on public programs as their main source of income,while only a little part of rural elderly are in this situation;thirdly,for a long time,China runs two more tiers of employment-based public pension:pension plans for non-governmental workers funded by contributions from employees and employers,as well as pension plans for government employees(including public institutions)funded entirely from the government budget.Given these situations,it is supposed to establish an integrative pension system that covers the whole population,which will promote social equality and ensure sustainability,it is the main direction of the pension reform in China.It will be a great improvement for China since the old pension system has been criticized as segmented,regionally imbalanced,fiscally inefficient and socially and economically unsustainable if it succeeded.This paper focuses on the reform of the integration of pension systems in China.The integration of the pension system mainly refers to the national coordination of the pensions,that is,the unified implementation and management of various projects of pension systems nationwide."The open method of coordination" is the integration instrument for the reform,which is said to be soft law and has been characterised as flexible in the sense that it can easily be applied in areas the EU has weak competence and allows for diversity while striving for convergence.Consequently,the open method of coordination became rapidly one of the main instruments to further develop the European social dimension,generally considered as a politically sensitive and a complex policy field,such as pension,education,social integration,etc.In the field of EU pensions,the EU adopts the open method of coordination as an instrument to explore how the EU can coordinate and resolve contradictions when there are many different interests among different Member States,and eventually achieve the aim of the integration of the pension systems in different Member States.China is a large country with significant multi-level governance environment,which is similar with the EU.When it comes to reform the pension system for China,inspiration could be drawn from the EU in the sense that at EU level through the open method of coordination requirements and guidelines are issued for a modernised and sustainable pension scheme for the Member States.How to comply with those requirements and guidelines is left over to the Member States themselves,which are very diversified when it comes to pension schemes.However,the basic structure of a central government(the EU/China)setting out the basics,where the Chinese central government is supposed to do this in a less voluntary manner that the EU is doing,with obligations to comply with at decentralised level(Member States in the EU/Provinces in China).The main conclusions of this paper are threefold:Firstly,the reform of the integration of China's pension systems is facing severe challenges,and there is still a long way to go before achieving the goal of integration.Secondly,in the field of pensions,China and the EU have the similar goal demands,and inspiration could be drawn from the EU to reform the integration of China's pension systems.Thirdly,the open method of coordination matches the reform of China's pension system integration.As a unified social system,China's political structure,economic level,financial conditions and cultural systems could remove the key obstacles for the practice of the open method of coordination in China.All in all,as a new soft instrument,the open method of coordination is a device to reform the integration of China's pension systems,which is expected to run a long term,non-segmented,sustainable and productive scheme for China.