More equitable fiscal systems are needed to improve welfare provision for migrant workers in China and Vietnam

Abstract

China and Vietnam have a relatively low proportion of tax revenue contributing to their public expenditure budgets. Various forms of tax incentive are given to investors, which has come at the expense of government fiscal revenue. Although this has facilitated fast economic growth, public expenditure on social protection in Vietnam and China has lagged behind most developed and developing economies, which constrains the scope and scale of social protection to citizens. The costs of social protection in both countries, particularly for the working population, have been mostly shouldered by employers and employees, with increasing involvement of the market players.