Social protection innovation and challenges in China and Africa: selected comparative perspectives

• Author: Marius Olivier
• Pages: 429-472

FRONTIERS OF LAW IN CHINA

VOL. 12 SEPTEMBER 2017 NO. 3

DOI 10.3868/s050-006-017-0024-7

ARTICLE

SOCIAL PROTECTION INNOVATION AND CHALLENGES IN CHINA AND AFRICA:

SELECTED COMPARATIVE PERSPECTIVES

Marius Olivier*

Abstract This contribution concerns social protection innovation in China and Africa

as regards aging populations and social security extension to informal workers. China

has adopted and extended several contributory schemes and non-contributory

arrangements. Yet, the country faces significant challenges in terms of a funding gap,

high urban contribution rates, inadequate benefits and an existing benefit gap, inequality

in the treatment of public versus private sector workers, and insufficient migrant worker

coverage and portability arrangements. While population aging is less of a problem in

most African countries, African retirement arrangements experience challenges in

relation to funding limitations, and a host of shortcomings as regards contributory

schemes and non-contributory arrangements.

China has seen a decline in the numbers of those who work in the informal economy.

Ensuring proper coverage of such workers have included strengthened labor market

regulation: An integrated approach is called for. In Africa, access by these workers to

social security is limited. Attempts to achieve coverage extension have included

conceptual developments, institutional initiatives, tailor-made design modalities, and a

range of supportive arrangements (such as access to finance and to markets). All these

developments reflect a new appreciation of the leading role of the state in the

provisioning of social security.

Keywords social protection, social security, aging, informal workers, international

standards

INTRODUCTION .................................................................................................................... 430

I. THE VALUE OF HUMAN RIGHTS AND DEVELOPMENTAL PERSPECTIVES — CHINESE

AND AFRICAN RESPONSES...................................................................................... 431

A. International Framework .................................................................................. 431

* Marius Olivier, Adjunct-Professor, Law School, University of Western Australia, Perth Western

Australia 6009, Australia; Extraordinary Professor, Faculty of Law, North-West University, Potchefstroom

2531, South Africa. Contact: olivier@iislp.net.au

This contribution is based on a presentation initially made at the “China–Africa Colloquium on Evolving

Sino-African Relations,” held at the University of Cape Town, South Africa, on May 21–22, 2015, and

subsequently, in revised format, at the “International Conference on Challenge and Response in Labour Law

under the New Normal Economy,” Beijing, China, on Oct. 22–23, 2015.

430 FRONTIERS OF LAW IN CHINA [Vol. 12: 429

B. Chinese Responses ............................................................................................434

C. African Developments....................................................................................... 436

1. Overall Context.............................................................................................. 436

2. Contributory Schemes ................................................................................... 438

3. Non-Contributory Arrangements................................................................... 438

4. Legal and Policy Frameworks .......................................................................439

II. AGING POPULATIONS: CHINA................................................................................. 444

A. General Developments and Overall Challenges............................................... 444

B. Specific Challenges and Innovative Responses................................................. 445

1. Funding Gap ..................................................................................................445

2. High Urban Contribution Rates, Inadequate Benefits and Benefit Gap:

Retired Urban and Rural Workers’ Benefits.................................................. 445

3. Discrepancy/Inequality: Public versus Private Sector Workers .....................446

4. Enhancing Coverage of Migrant Workers and Portability .............................446

III. AGING POPULATIONS: AFRICA.............................................................................. 447

A. General Developments and Overall Challenges............................................... 447

B. Specific Challenges ...........................................................................................448

1. Funding Limitations....................................................................................... 448

2. Contributory Schemes ................................................................................... 450

3. Non-Contributory Arrangements................................................................... 451

IV. EXTENSION OF SOCIAL PROTECTION TO INFORMAL WORKERS: CHINA................ 452

V. EXTENSION OF SOCIAL PROTECTION TO INFORMAL WORKERS: AFRICA................ 454

A. Informal Economy Contours ............................................................................. 454

B. Extent of Informal Economy Engagement......................................................... 456

C. Reasons Why Informal Economy Workers Are Excluded from Access to Social

Security ............................................................................................................. 457

VI. EXTENSION OF SOCIAL PROTECTION TO INFORMAL WORKERS: INTERNATIONAL

STANDARDS, HUMAN RIGHTS CONSIDERATIONS AND COMPARATIVE

PERSPECTIVES....................................................................................................... 458

A. International Standards.................................................................................... 458

B. Human Rights Considerations.......................................................................... 459

C. Comparative Perspectives................................................................................ 460

1. Conceptual Developments............................................................................ 460

2. Institutional Initiatives.................................................................................. 461

3. Tailor-Made Design Modalities .................................................................... 465

4. Supportive Arrangements: Consultation, Communication and an Enabling

Framework.................................................................................................... 466

CONCLUSION........................................................................................................................ 468

INTRODUCTION

Both China and Africa have seen significant social security coverage expansion in the

2017] SOCIAL PROTECTION INNOVATION AND CHALLENGES IN CHINA AND AFRICA 431

areas of, firstly, aging populations and, secondly, social protection for informal workers.

China has introduced and extended several contributory schemes and non-contributory

arrangements in response to the increasing problem of aging. For this purpose it has

adopted a range of legal instruments. These developments have taken place in the wake of

significant challenges, particularly in relation to a funding gap, high urban contribution

rates, inadequate benefits and an existing benefit gap, inequality in the treatment of public

versus private sector workers, and the need to enhance migrant worker coverage and

portability arrangements. While Africa has not yet been exposed to the phenomenon of

aging to the same extent as China, the retirement arrangements of African countries have

experienced challenges in relation to funding limitations, and a host of shortcomings as

regards contributory schemes and non-contributory arrangements.

Social security for informal (economy) workers appears to be a challenge both in

China and particularly in Africa, in view of the fact that the sheer size of informal

economy employment exceeds work in the formal employment sphere in many African

countries. China, on the other hand, has seen a decline in the numbers of those who work

in the informal economy. Steps taken by China to ensure proper coverage of such workers

have included strengthened labor market regulation. There are several reasons why in the

African context access by these workers to social security is limited. Chief amongst these

is the focus of contributory schemes on those who work for an identifiable employer in

formal employment relationships. Non-contributory schemes are effectively restricted to

certain categories of poor people in need of support. Yet, various attempts have been

made to achieve coverage extension — through conceptual developments, institutional

initiatives, tailor-made design modalities, and a range of supportive arrangements (such

as access to finance and to markets).

This contribution concerns itself with these developments and certain innovative steps

taken in China and Africa to respond to the coverage extension challenges. For this

purpose, it considers developing international and regional instruments and standards, as

well as constitutional prescripts in some countries and good practice in comparative

jurisdictions. In this context, it also reflects on the role of the state in the provisioning of

social security, and the need to build on equal and equitable outcomes in order to ensure

that a proper policy-based and statutorily mandated social security framework is in place.

I. THE VALUE OF HUMAN RIGHTS AND DEVELOPMENTAL PERSPECTIVES — CHINESE

AND AFRICAN RESPONSES

A. International Framework

This contribution deals with social protection innovation in China and Africa, and

primarily in two key areas of significant policy and practical importance in these

geographical domains, namely, aging populations and the extension of social protection to

informal workers. Of course, this discussion should be seen against the background of