Research On The Improvement Of The Social Security System In China, Based On The Affect To Economic Growth

Since the reform and opening up, our economy improved greatly, the GDP and GDP per capita maintain a high growth. Meanwhile, social security system,as the society "stabilizer" and "safety" also got to a great extent. However, from the structure, there are some problems that economic growth are facing, such as insufficient domestic demand and high savings rate, the global financial crisis intensifies the international conflicts. In order to deal with the international financial crisis, and promote steady economic rapid development, China put in packages of measure to stimulate economic development , increase government investment largely. But in the long run, extend domestic demand actively, especially consumption demand, enhance the function of domestic demand pull the economic is the key factor.High savings rate, on the one hand, squeeze consumption,make against people's living standard;on the other hand, because of the Law of Diminishing Marginal Return , a optimal saving rate exists. When the actual savings rate is greater than the optimal saving rate, reduce savings will become a pareto improvement. The perfectionless of the social security system in China was an important reason of the high savings rate. Improve the social security system, can reduce savings, thus promote economic growth. The path is: improve the social security system-residents anticipate their future income will rise- residents reduce the preventive savings and increase current consumption- economic growth. This effect of social security system to economic growth is called the welfare effect of the social security system. And, "the welfare effect" is much more distinct for low-incomer. Based on "the welfare effect", this paper summarizes the problem of the current social security system, and puts forward some proposal on the reform of the social security system .