GUANGDONG has begun a campaign to increase worker participation in pension and unemployment insurance schemes. The schemes aim to ease hardship on workers - and consequently strengthen social stability and the party's grip on power - as state-sector reforms gather pace and lay-offs increase. Guangdong party secretary Li Changchun and Governor Lu Ruihua have directed local cadres to take personal responsibility for reaching targets set by the provincial Government by the end of the year. Many local governments have been reluctant to implement social security reforms, for fear of scaring away potential investors. The targets include a 95 per cent worker participation rate in pension and unemployment insurance schemes. According to the Guangzhou Daily, 6.62 million workers in Guangdong were enrolled in pension insurance schemes at the end of June, compared to 5.02 million at the end of last year. Also during the first six months of this year, the number of workers enrolled in provincial unemployment insurance schemes increased 21 per cent, from 4.41 million to 5.34 million. Guangdong also wants to ensure that all retirement payments are handled by local government-controlled pension funds. In the past companies were responsible for collecting pension funds from employees and distributing them to retired workers. But factories that ran into economic difficulty were frequently unable to make good on these payments. During the first six months of the year about 70 per cent of all retirement benefits were paid out by local-government pension funds, and the rest by enterprises. By the end of the year the Government wants 100 per cent of all payments to flow through local-government pension funds. But Zeng Shouxi, director of the Guangdong Audit Bureau, reported more than 41 million yuan (HK$37.3 million) in retirement funds - entrusted to local governments between 1994 and 1999 - could not be accounted for. The campaign is also targeting labour-intensive enterprises - many of which are funded by money from Hong Kong or Taiwan - that either evade paying welfare contribution fees altogether, or that under report the number of workers they employ. A company in Huangpu, a port district in eastern Guangzhou, reported that it employed only 240 workers. But when inspectors visited the company in April, they found that its workforce numbered almost 4,500.