February 24, 2006

China frets over pensions for greying population

BEIJING (Reuters) - China's rapidly growing elderly
population could surge as high as 430 million by 2051, when
almost one in three citizens will be 60 or over, posing a grave
challenge for already strained state social welfare and pension
systems, Xinhua news agency said on Friday.

The aging population was now growing by 3 million a year
from the current 143 million, it said.

"China is facing surging demand from the elderly population
in terms of social welfare and medical services," Li Bengong,
an official with the China National Committee on Aging, was
quoted as saying.

"Welfare services can not match the rise in demand."

People retiring in China today do not enjoy the
cradle-to-grave welfare provided to previous generations which
has been replaced with a mash-mash of government and corporate
pension plans experts say are riddled with problems.

Some 85 million elderly people in rural areas, or 65
percent of China's total aging population, "do not benefit from
the country's social welfare system, pensions and adequate
medical care," Xinhua said.

China's social welfare expenditures hit 350.2 billion yuan
($43.5 billion) in 2004, up 65.5 percent from 2000, it said.

Last March, Chinese media reported the pension system was
facing a shortfall of more than $300 billion.

Defaulting on pension payments and lack of medical coverage
are two key flash points for unrest, sparking protests by
retirees across the country.

Communist Party leaders are expected to move toward
improving social services after years of focusing on speeding
up economic growth in the 11th Five Year Plan, the new roadmap
for the world's top-five economy.

Some blame China's controversial one-child policy for the
aging of its people, criticism the committee said was
unfounded, though it acknowledged lower birth rates were a key
reason, along with longer life expectancy.

With China's population still expected to rise by about 10
million people a year, experts say, the government has no plans
to ease the one-child policy.