Charts of the Day: China’s Pension System Is Out of Pocket
Bad news for anyone born in China after 1980. The country’s pension system is expected to run dry well before that generation retires in 2035.
According to a report released this month by the Chinese Academy of Social Sciences (CASS), the money that has been accumulating in China’s pension funds will fall to zero in 2035 after peaking in 2027 at 6.99 trillion yuan ($1.04 trillion).
In China, most provincial-level governments top up their own pension funds by taxing workers’ wages, though last year the central government created a separate pool of money to redistribute funds from regions with pension surpluses to those with shortfalls.
Without government subsidies, the pension contributions collected this year will not be able to cover the country’s pension obligations. In 2050, the annual balance is expected to fall into a 16.73 trillion yuan deficit.
Through subsidies, the government can put off the pension deficit, but that won’t change the fact that the current system is running out of money.
Even with subsidies, the pension system is forecast to begin running an annual deficit — estimated at 118.1 billion yuan — in 2028. That figure is expected to reach 11.28 trillion yuan in 2050.
The pressure on the pension system is steadily increasing. At present, one pensioner is supported by approximately two workers, but by 2050, each pensioner will be supported by only one worker, the CASS report said.
The report also shows a huge discrepancy in the health of the pension funds of each of China’s provincial-level regions. South China’s Guangdong province, which reported the highest gross domestic product (GDP) in the country in 2018, has the largest pension surplus, roughly 200 billion yuan. In contrast, the northeastern province of Liaoning, whose economy is struggling, will not be able to cover its pension obligations this year and is expected to become the biggest beneficiary of the central government’s redistribution fund.
Last year, there were 249 million people over the age of 60 in China, accounting for 17.9% of the population, according to data released by the National Bureau of Statistics.
Contact reporter Gao Baiyu (email@example.com)
Jul 28 06:49 PM
Jul 28 05:54 PM
Jul 28 03:25 PM
Jul 27 07:11 PM
Jul 27 05:06 PM
Jul 27 04:09 PM
Jul 26 07:29 PM
Jul 26 06:04 PM
Jul 23 08:14 PM
Jul 23 06:25 PM
Jul 23 02:46 PM
Jul 22 07:00 PM
Jul 22 05:51 PM
Jul 22 04:59 PM
- 1Baidu Shows Its Self-Driving Ambitions With Base in Shanghai’s Auto City
- 2 Gallery: Nanjing Tackles Covid Outbreak Head On
- 3Guaranteed Loans Are One Sign of Confidence in Chinese Companies
- 4Caixin China Biz Roundup: Beijing Reports New Covid Case
- 5Chips, Cars Power Southeast Asian Exports Beyond Pre-Covid Levels
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas