This is part of the reason the Chinese Communist Party is racing ahead with their implementation of the social credit system and the surveillance state stuff.
If they don't get control ahead of what's coming, they are out of power. And like politicians everywhere and at all times, excepting maybe Cincinnatus and Geo. Washington, power is the name of the game.
From Pension Pulse:
Chief Investment Officer reports that due to an aging population and dwindling workforce, China’s state pension fund could become insolvent by 2035, according to a report from the Chinese Academy of Social Sciences:
“The basic pension system has long faced the challenge of being unable to make ends meet,” said the Pension Fund Actuarial Report 2019-2050. “If it had not been for the financial subsidies, the pension funds would have already begun the net outflow this year.”No doubt, China's social security system is under increasing strain as a result of a rapidly aging population and a shrinking workforce.
According to the report, the urban worker pension fund, the heart of the country’s pension system, held a reserve of 4.8 trillion yuan ($715.5 billion) at the end of 2018. The report forecast the system will peak at 7 trillion yuan in 2027, then steadily decline to zero by 2035.
The report calculated the sustainability of the pension fund until 2050, and expects the number of insured workers, which currently numbers 270 million, will increase by 1% to 2% per year. However, by 2035, the increase ratio is expected to slow, and by 2047, the number of insured workers is forecast to peak at 345 million, after which it is expected to start declining. By 2050, the total number of insured workers could fall to 341 million, and the dependency ratio of the insured workers is expected to increase to 81.8% in 2050 from 37.7% today.
The number of insured workers paying their premium is expected to peak at 290 million by 2048, and then drop to approximately 289 million in 2050. And the dependency ratio of the pension fund contributors who have actually paid their premium will increase to 96.3% in 2050 from 47% 2019. This means that if two workers are supporting one retiree in 2019, only one worker will support one retiree in 2050. At the same time, the insured retiree population is expected to increase to 278 million in 2050 from 102 million in 2019.
The report also found that there will be a rapid increase in the income and expenditure of the pension fund over the next 30 years. The fund’s income is expected to be 3.71 trillion yuan, or 3.9% of China’s GDP this year, but will increase to 23.63 trillion yuan in 2050, or 6.0% of GDP. The pension fund expenditure, which is expected to be 3.6 trillion yuan this year, will increase to 34.91 trillion yuan in 2050, accounting for 8.9% of China’s GDP.
In an op-ed in state-run English-language newspaper China Daily, Zheng Bingwen, director of the Chinese Academy of Social Sciences’ Center for International Social Security Studies, said it was time for pension reform in the country.
“Since the aging population trend cannot be reversed, we can do the next best thing: expedite the pension fund reform and take measures to make the pension fund system more sustainable,” wrote Zheng. “For instance, the retirement age could be raised, and the minimum 15 years’ pension insurance payment period extended. Also, the pension premium collection and payment system should be improved.”
The country's demographic time bomb is well-known. By 2025 the average age in China will be 40, in 1995 it was 27. Although efforts are underway to recharge its population growth, there remain serious challenges and new policies will take time to work.
As the population ages, it's putting pressure on the state pension system. This is why experts like Zheng Bingwen, director of the Chinese Academy of Social Sciences’ Center for International Social Security Studies, are calling for sensible reforms like raising the retirement age and extending the minimum 15 years’ pension insurance payment....MUCH MORE
