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Subject

Pension reform in China.

Significance

China's main pension fund could be completely depleted as early as 2035. New research published by the Chinese Academy of Social Sciences (CASS) predicts that expenditure from the urban worker basic pension fund will begin exceeding contributions in 2028, after which reserves will decline exponentially and could be exhausted within eight years. The government has already introduced measures to address the most pressing problems, such as the gross imbalance between regional pension funds and the failure of employers to contribute to the scheme.

Impacts

Younger workers will rely on their own savings and investment schemes, having little faith in the government pension.

Rural residents, the self-employed and precariously employed have little or no meaningful state-backed pension.

International insurers will eventually be allowed to enter China's private pension sector.

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