Experimentalist Governance in China: The Making of the New Pension Regime

With the changes of state-owned enterprise reform, rapid urbanization and large-scale labor migration from rural to urban area, China began to build a new pension system for urban employees. To face these challenges flexibly... [ view full abstract ]

With the changes of state-owned enterprise reform, rapid urbanization and large-scale labor migration from rural to urban area, China began to build a new pension system for urban employees. To face these challenges flexibly and adequately, the Chinese government makes the new pension regime with the strategy of “experimentalist governance”. In the policy making process of the new pension system with fully funding the individual account and that for migrant workers from rural areas, the Chinese central government either design experiments initiatively or allow local innovative practices. However, the national plan and financial support from the central government are key factors that contribute to the progress of the pension regime. This paper analyses the process of policy making of the Chinese pension system for urban employees and describes the different roles of the central authority and local governments. We argue that the success of experimentalist governance in pension field required both administrative and financial recentralization.