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WB Report Warns of China's Aging Rural Population

04-09 14:34 Caijing
China may face a huge challenge from rising aging populations in the coming few decades, especially those in rural areas, a World Bank report warned.

China may face a huge challenge from rising aging populations in the coming few decades, especially those in rural areas, a World Bank report warned.

That is because Chinese income is far below those of people in developed countries and even Asian countries, the report titled Elderly and Old Age Support in Rural China: Challenges and Prospects said.

That is especially the truth for aged rural population, which occupies the largest share of total aged population in the country, and the number of which has been increasingly on the rise, according to the report.

“Aging is becoming far more pronounced in rural than in urban areas, due to the demographic transition and continued movement of young adults into cities,” said Dewen Wang, Social Protection Economist of the Bank and a co-author.

“The gap in old-age dependency ratios between rural and urban areas is expected to widen from 4.5 percent in 2008 to over 13 percent by 2030 when the old-age dependency ratio will reach over one third in rural areas and 21 percent in urban areas.”

Moreover, the aged in rural areas are worse off and more vulnerable compared with their counterparts in urban areas, especially when many of them lack of enough economic support from their children.

“Rural elderly people have been significantly worse off compared with both urban elderly people and younger rural people, even though they work longer and save a substantial share of income across their life cycle,” said Klaus Rohland, World Bank Country Director for China.

"The mass rural-to-urban migration that has happened in China since the 1990s is changing the context of family support to rural elderly people," said John Giles, World Bank's Senior Labor Economist and lead author of the report.

"This change can be seen in the rapid shift in living arrangements in rural areas, where co-residence of rural elderly with their adult children fell from 70 percent in 1991 to 40 percent by 2006. Remittances from migrant adult children have positive effects on elderly rural incomes, but it is burdensome for the rural elderly to continue working into old age and to care for their "left behind" grandchildren. And current extended family structures will place increasing strains on adult children to provide support in the absence of sustained government support."

China has piloted a pension reform in rural areas since 2009, and has expanded ever since, with full geographic coverage planned by end-2012.

These programs could be of particular value to rural elder people, the report said, but adding that the rural pension reform, though encouraging, could still face challenges as it consolidates.

"These include the regulation and oversight of funded portions of rural pensions, the need to incentivize sustained participation of younger rural workers, and the relatively low retirement ages that do not yet reflect the changing rural demographics of rural areas,” said Philip O’Keefe, the Bank’s Human Development Sector Coordinator for China and also a co-author.

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