Pension reform in China

Abstract

This article analyses China's progress in creating a national old-age insurance system, providing a detailed description of the systemand an assessment of the degree to which it has so far realised its primary goal of social security for more people. Since 1997, there have been many reforms, but despite progress, the scope of the system is limited, with the coverage rate among urban employees being below 50 per cent. The rural population largely remains outside the system, and it seems likely that the majority of the population will be dependent on family support for many years to come. There is a "demographic window" until around 2015 to address these shortcomings. Extending coverage through improved compliance by employees and companies as well as the continuing financial commitment towards the National Social Security Fund are crucial to create the financial and institutional basis that can cushion the effects of a much older population in the years ahead. Show more