Ageing population cannot be ignored
By Guo Zhe (China Daily)Updated: 2006-12-19 10:18 According to the latest issue of China Economic Weekly, the Ministry of Labour and Social Security announced that the country's pension fund had a deficit of 800 billion yuan (US$100 billion) by the end of 2005.
Another sombre fact is that China is quickly becoming an ageing society.
A sample survey of the population at the end of 2005 indicated that 144 million people were aged over 60 or above, accounting for 11 per cent of the total population. The figure would jump to more than 28 per cent by 2050.
A research report by the Deutsche Bank estimated that every 100 workers would have to support 79 retirees in 2050 if China does not change the current limits on the retirement age. Based on that, some experts suggested revising the retirement age and extending working lives to ease the pressure on the pension fund.
China, the world's most populous country, has yet to feel the pressure of the ageing population. But the problem can no longer be ignored, otherwise the ageing population will cast a huge shadow over China's economic development in the coming decades.
The ageing problem exists in many countries other than China, but most developed countries have an annual GDP of between US$5,000 and US$10,000 for each of its citizens.
In contrast, China only had an annual GDP of US$1,700 per capita last year it will experience an ageing population before it became affluent.
To make things worse for China, the country has not established a pension plan covering all of its citizens.
The current pension plan only includes employees in State-owned or collectively owned enterprises in cities. Civil servants have an independent pension plan.
About 10 per cent of rural residents have set up their own small-scale pension plans. The rest of China's rural citizens, the majority of them, are excluded from any basic pension insurance.
Currently only 25 per cent of the working-age population is covered by any
kind of old-age pension plan.
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