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China Pension Shortfall to be CNY18.3Trl in 2013: Report

06-14 14:11 Caijing
China’s pension shortfall is expected to be 18.3 trillion yuan ( about 2.9 trillion U.S. dollars) in the year 2013, building a case for a rise of retirement age.

China’s pension shortfall is expected to be 18.3 trillion yuan ( about 2.9 trillion U.S. dollars) in the year 2013, according to a report, headed by China’s two leading economists, building a case for a rise of retirement age.

The research group with Fudan University, led by chief economist with the Bank of China Cao Yuanzheng, and Ma Jun, chief China economist for Deutsche Bank AG, conducted the research based on data published by the National Bureau of Statistics.

According to their calculation, China’s pension shortfalls could reach 18.3 trillion yuan in 2013, and 68.2 trillion by 2033, on unchanged pension polices, and assume GDP grows 6 percent annually. That will account 38.7 percent of GDP that year.

China’s pension liability could become a massive fiscal burden as more and more of its population grows grey, the report said, suggesting the retirement age should be raised by seven years to ease pressures.

Among other measures, the government should also transfer 80 percent of shares in state-owned companies to the national pension fund and restructure the public institutions, it said.

A Boston Consulting Group report in late April said deficit in China’s pension system had climbed at an annual growth rate of 25 percent, hitting 195 billion yuan in 2010. The deficit may reach 2.5 trillion yuan in the next 20 years, it predicted.

Government data showed China’s labor pool will begin to shrink from 2015, and the old over 50 will be 290 million in 2035, compared with 810 million of working labor force, which means there will be less than two workers for every retired by the year.

Related: China May Raise Legal Pension Age Under Pressure From Aging(Society)[2012-06-06]

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