Welfare regionalism in China: A study of social insurance implementation in Wenzhou and Kunshan

In recent decades, China has experienced the impact of decentralization in its labor welfare implementation which is transforming the country’s welfare system. The new welfare regime in China has resulted in a highly fragmented social insurance system. This research is carried out in this particular policy context to explore the rise of welfare regionalism in China, with particular reference to the varieties of social insurance implementations in the coastal areas. To understand this issue, this research is conducted in two parts. Based on a critical review of existing literature, this research integrates the theoretical approaches of the welfare production regime and the local politics of China to develop an analytical framework for examining welfare regionalism in China. In order to identify what institutions have caused the different social insurance implementations in a number of coastal cities, fuzzy-set/qualitative comparative analysis (fs/QCA) is adopted. The findings reveal that local production regimes have trumped central government designs and they have more leverage on social insurance development in China. More specifically, the decentralization policy doesn’t follow a progressive social insurance strategy, which is attributed to the industrial regime characterized by the high-tech industry and big-firm dominance. In contrast, with the decentralization policy, it was discovered that a production regime dominated by small privately-owned firms and a general skills profile tend to hinder the expansion of labor insurance. In addressing how social insurance are implemented at the local level, a case study was conducted, with particular attention given to how different stakeholders interact in shaping the formation and implementation of social insurance schemes in Wenzhou city in Zhejiang province and Kunshan city in Jiangsu province. A booming private economy and long-term collusion between the local business sector and local government have created in Wenzhou a pro-business welfare system, in which there is minimal welfare provision for the labors. Under this welfare regime, almost all the migrant workers are excluded from labor insurance. In contrast, with a successful industry upgrade, the celebrity effect and state-led development, Kunshan has developed a generous welfare system and one that is more equitable. The findings in this research have demonstrated that regionalism remains an enduring feature of the Chinese welfare regime. The research results, together with existing theories of varieties of welfare regimes, have given us new insights into analyzing welfare regionalism in China. The implications for welfare regionalism are three-fold. It is a peculiar policy process in China, in which combination of local discretion and central intervention has facilitated welfare formation in China. As a result, a fragmented configuration of social insurance schemes has emerged in China, putting obstacles to the proliferation of a national welfare policy. In addition, this has contributed to the paradigm shift of Chinese welfare regime research from stratification to regionalism. How to achieve a national welfare state under the current fragmented welfare regions in China will be an ongoing and heated debate. All rights reserved.