Guangzhou's labour and social security bureau recently announced its decision to cut medical and work injury insurance premiums between 1 May and 31 December this year to combat the financial crisis, support the development of enterprises and save jobs.

Under the new policy, premiums on basic medical insurance will be lowered from 8% to 7% for urban workers and from 4% to 3% for urban workers with flexible employment. For work injury insurance, premiums originally paid by different types of participating employment units at 0.5%, 1.0% and 1.5% of their total payroll respectively will be adjusted to 0.4% across the board. Guangzhou had earlier slashed by 90% the rate of unemployment insurance premium payable by participating employers and workers from 3% to 0.3%. That policy took effect on 1 January this year and would tentatively last one year. It is estimated that these premium slashes will translate into savings of Rmb3 billion for enterprises and individuals.