China has the largest aging population in the world and now faces huge pension-fund pressure. With moderate economic growth and decreasing demographic dividends, some believe the current funds are likely to experience big deficits in coming years. 

Is this a growing danger? What are the changes taking place in China’s pension reform? And what major challenges will have to be overcome as China’s population ages and its economy continues to undergo transformation?

According to the Ministry of Human Resources and Social Security, in 2016 and the first quarter of this year, there has been a surplus in China’s pension funds. But there are estimates that predict the funds will experience huge deficits in coming years. Dr. Hu Naijun from School of Public Policy and Management at University of Chinese Academy of Science shared his opinion on the issue.

“In the short term, it is quite sure that we have surplus. That is to say, our pension income is right now much larger than our pension expenses. But in the long run, it is very difficult to say what kind of scenario we are going to have. But it is estimated that during the peak time of our aging population around 2040 to 2050, there might be a slight deficit. But it is still a long way to go.”

There are more than 220 million people over the age of 60 in China – more than 16 percent of the population – and the numbers are growing. Victor Gao Zhikai, Current Affairs Commentator thought under this circumstance, the government should pay more efforts to providing a better safety net for the elderly.

“We need to make sure that eventually in China the situation will be whoever he or she is, once he is old and without the ability to work for him or herself, there should be certain kind of arrangement so they do not need to worry about getting old, and about whatever that may be happening to them. And this package, this safety net is still not very complete in China. And we need to do more to make sure that this safety arrangement will be there, in place, to take care of the elderly in the future.”