Faltering Chinese industries are leaving companies unable to pay into plans for workers who are retiring, creating a pension crisis. The government has been trying to address the problem by offering more generous retirement benefits and raising the age at which people can collect their pensions. Local governments have given companies leeway on pension payments, despite the fact that China’s Academy of Social Sciences think tank has predicted that the pension surplus will turn into a deficit by 2023, reaching $118tn by 2050.
Faltering Chinese industries are leaving companies unable to pay into plans for workers who are retiring, creating a pension crisis. China’s low retirement age and its 35-year one child policy setting the stage for a demographic time bomb; while there are currently seven workers for every person over 65 in China, that will fall to two workers by 2050, according to the UN. Local governments have given companies leeway on pension payments, despite the fact that China’s Academy of Social Sciences think tank has predicted that the pension surplus will turn into a deficit by 2023, reaching $118tn by 2050.