Posted by James Flanagan

From the article at Caijing, China Unemployed Insurance Claim Rate Down:

Unemployment insurance is being claimed at a rate of under 30 percent of total jobless, reflecting the large number of people ineligible because they did not contribute to the scheme, the Ministry of Human Resources and Social Security and National Bureau of Statistics said on May 19.

Only 2.6 million out of the 8.9 million unemployed made claims in 2008, the government agencies said. While the registered urban unemployed population increased by 560,000 people, the number of claims dropped by 250,000.

Unemployment benefits come out of China’s five social security insurance funds, which have a combined 1.5 trillion yuan in assets.

Employed workers are required to make monthly contributions but many do not and are not protected when they lose their jobs.

The people most likely to keep up contributions and be eligible to make claims are permanent workers, while temporary workers make up the bulk of those ineligible, said Wang Yanzhong, deputy chief of Bureau of Scientific Research Management at the Chinese Academy of Social Sciences.

Wang said the figures show that unemployment benefits have much room to expand coverage.

The registered unemployment rate was 4.2 percent at the end of 2008, the highest in three years. Real unemployment rate is estimated to be much higher.