ABSTRACT
A direct consequence of the progression of post-demographic transition is a progressively aging population. The 21st century is one with population aging. In China, the aging of the population is characterized by a fast speed, a high level, and an imbalance of regional distribution, and these unique characteristics and the immense size of the Chinese population are bringing China to integrate with the global wave of population aging.
“Aging before getting rich” is a challenge for the old-age social security system in China, and the only way to meet this challenge is to rely on reforms to come up with a comprehensive system. Among the reforms, the “torso” and crucial part is the structural reform of the old-age insurance system, while the reforms of the social welfare and support for the elderly are the “wings” that are indispensable to the “torso.”
The government’s expenditure on pensions will account for more than 10.0% of the GDP and more than 29.0% of the total salaries in 2029 if the current measures to raise and pay for old-age pensions are to be maintained, which will likely exceed the safety zone that is recognized internationally. Although China owns an ever-growing amount of personal savings in banks, the elderly have lower amounts of deposits, which account for only a small proportion of the national total, and it is not helpful to secure the social old-age system. Therefore, the global pension crisis is also present in China, only to a lesser degree compared to some countries, and reforms must be made to innovate the mechanisms and the measures to raise and pay for old-age pensions.
The aim of the pension reform is to establish a nationally unified system of additive and supplementary old-age insurance that is based on individual contributions with enterprise (unit) contributions on the side. The dual-double structure of the old-age insurance system that has different mechanisms between rural and urban areas and between urban employees of government agencies and other urban employees must be demolished and the new system should link individual accounts directly with pension payments so that the system is fair and sustainable.
Aging is the most prominent feature of the trend in population development in the 21st century, and it adds its mark to everything, including economies, science and technology, culture, and social development. Therefore, population aging must be accounted for in the efforts to realize the Chinese dream of the great revival of the Chinese nation or to carry out sustainable development of the population, the resources, the environment, the economy, and the society, so that the society is shared by everyone regardless of age.
