In attempting to establish a social security system that would function to smooth the transition from a planned to market economy, the government of China has, for most of the time in the past decades, focused its efforts on setting up social insurance programs in the urban areas. Along with the emergence of urban poverty since the mid 1990s, the emphasis of the government has shifted to means-tested social assistance programs as the major means to combat poverty and maintain social stability. However, with the absence of more equitable social and economic policies that can protect people against the many risks associated with a market economy, the role of social assistance is very limited.

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