Liaoning province will be the testing ground for a new social security safety net, Premier Zhu Rongji says.
Mr Zhu outlined the plan during a recent tour of Shandong province, Xinhua reported yesterday.
The State Council is putting the finishing touches to the new programme, which will begin in Liaoning province after it is formally approved next year, Mr Zhu was quoted as telling cadres in Shandong.
The programme, which is expected to call for a mandatory financial contribution from employers and employees, will be copied in other provinces if the experiment succeeds.
The current system has been widely criticised for being inadequate and vulnerable. Economists say that not only are many pensioners left without sufficient support when they retire, the safety net fails to cover the millions of people who work outside the state system.
The decision to overhaul China's social security system was made at a Communist Party conference last month.