As long ago as the 1980s, in tandem with its gradual implementation of market economy reforms, the Chinese central government also began to introduce changes in the field of social security as part of a move away from the dominant principle of state provision towards a greater espousal of the insurance principle. For demographic reasons, but also in an effort to get the private sector to pay a greater share of the cost, the intention was that future social security should be shaped in a way which combined universal, pay-as-you-go basic provision with individually funded supplementary provision. While the first half of the 1990s saw the establishment of a broadly uniform system of basic pensions, the 1998 attempt to introduce a general system of basic health insurance has not yet proved comprehensively successful, even for the population of the towns and cities, despite the success of pilot projects. This article, based on wide-ranging field studies, seeks to assess progress to date and future prospects for success, from a Chinese and an international perspective. Consideration is given to the situation of both the urban and rural populations.