LIFE GUARANTEE: Senior citizens from a village in Lingshi County, Shanxi Province, get their monthly pension under a pilot program of the rural pension insurance system (WANG JIN)

"During our deliberation of the law in the last three years, we tried to unify the social insurance systems for rural and urban residents. For example, capital sources and payment standards of medical insurance for rural and urban residents are becoming the same," said Xin.

Building a social security system benefiting all urban and rural citizens has also been written into a proposal made by the Communist Party of China Central Committee on formulating the country's 12th Five-Year Program (2011-15) on National Economic and Social Development issued on October 27.

The five forms of insurance, co-financed by individuals, employers and the government, have accumulated trillions of yuan deposits.

China needs to invest 5.74 trillion yuan ($856.7 billion) by 2020 to build an all-round social welfare system to enhance people's livelihoods, according to the China Development Research Foundation, a government think-tank.

Many people hope the government would provide sufficient financial resources to guarantee the implementation of the new law. A study by Zheng Bingwen, a scholar from the Chinese Academy of Social Sciences, said the deficit of China's pension funds stood at about 1.3 trillion yuan ($194 billion), according to a report in July from Guangzhou-based Southern Daily.

"Whether the Social Insurance Law can be well implemented poses a test to the execution capacity of governments of all levels. The adoption of the new law indicates the government's concern about people's livelihoods, but only the sound implementation of the law can mean practical benefits for the people," said an editorial in newspaper Accounting Messenger.

In order to prevent the misappropriation of social insurance funds, the law says the funds' income and expenses, management processes and investment should be made public.

The law, to take effect on July 1, 2011, was first submitted to the legislature in December 2007, following a scandal in Shanghai involving a gaping 3.7 billion yuan ($552 million) debt to the city's social security fund.

Social security funds cannot be used to cover government budget deficits, build or renovate government offices or pay government agency day-to-day expenditures, according to the law's full text.

Furthermore, the law touches on social security information confidentiality issues, and says that social security authorities, executive agencies and personnel cannot disclose insurance information submitted by either employers or employees, adding that violations of such information confidentiality are subject to punishment.

Since the new law concerns the interests of almost every citizen, around 70,000 suggestions were collected from the public by the NPC Standing Committee over one and a half months in early 2009. According to a report in The Beijing News, the suggestions concentrated on the wide gaps between social insurance benefits enjoyed by rural and urban residents and the government's insufficient investment into social welfare compared with developed countries.

Drafting a social insurance law was first proposed and planned about 16 years ago by the top legislature, which has debated and deliberated on the current draft for three years.

Provisions relating to social insurance also apply to foreigners working in China, according to the new law.

"China's economy and society are becoming more and more open. Such a regulation follows international practice and gives equal national treatment to foreigners working in the country," Hu Xiaoyi, Vice Minister for Human Resources and Social Security, said at a press conference held by the NPC Standing Committee.