China capable of supporting its elderly

0 Comment(s)Print E-mail Xinhua, November 17, 2011
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A government official said in the Thursday edition of the People's Daily newspaper that China is and will always be capable of supporting its elderly as long as it continues to enjoy social stability and economic growth.

Hu Xiaoyi, vice minister of human resources and social security, made the remark in an article he authored in which he discussed the challenges facing China's pension fund plan.

China's elderly population reached 177 million at the end of 2010, or 13.26 percent of the total population. Some scholars expect the total dependency ratio (the number of dependents, children and elderly included, per 100 working adults) to hit 50 percent around 2015, when the opportunity window for reaping a demographic dividend gradually shuts down, Hu said.

Hu said that a rapidly growing elderly population will create far-reaching implications for China's socioeconomic development for the next five to ten years.

However, Hu expressed confidence in the country's ability to support its elderly population and improve their lives in the meantime.

Prompt action must be taken in order to prepare for future challenges, including the creation of new government policies and fundraising, the official said.

China's pension program covers pension funds for urban employees and unemployed urban citizens, as well as a new "rural social pension insurance system" which has been in effect on a trial basis since 2009.

The provision of pension funds to unemployed citizens, as well as rural residents, has extended the nation's old-age security to "full-coverage," although discontent is still rife, according to a commentary published by the People's Daily along with the minister's article.

The discontent stems from the program's "low welfare level," inequalities among different social groups and inflation, the commentary read.

The base payment for the rural social pension insurance program, as well as the pension program for unemployed urban citizens, stands at 660 yuan (104 U.S. dollars) per person per year, well below the national poverty line of 1,196 yuan. Payments also vary between different social groups, including urban employees, rural residents and retirees from government positions.

Hu said that simply boosting pension welfare for different social groups is not the right way to address inequalities, although efforts should be made to narrow welfare gaps.

"In times of inflation, if the social security program does not address public concerns or accommodate their needs, discontent might be magnified," the commentary said.

Hu said pension reforms have been navigating "uncharted water," adding that there is still a long way to go for China to perfect its pension programs.

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