China under pressure to cover costs of ageing population

Beijing: China will face financial pressure in the future to cover its growing population of old people with its social insurance funds, a senior government official said on Monday. Chen Liang, an official with the Ministry of Human Resources and Social Security (MoHRSS), told an international symposium that the country needs to increase financial input into the funds and diversify investment channels to enhance returns.

According to statistics from the Chinese Academy of Social Sciences (CASS), the number of those over 60 will reach 200 million in China this year, accounting for 14.8 per cent of the total population. The number will increase by 10 million every year until 2025, making it the fastest increase in Chinese history. According to the UN, a country is considered to be ageing when 7 per cent of its population is over 65, or if 10 per cent of its population is over 60. To tackle the payment pressure, China has to preserve and increase the value of its social insurance funds and ensure the sustainability of its policies, said Chen, director of Social Insurance Funds Management Department under the MoHRSS, state-run Xinhua news agency reported. China`s social insurance funds contain five parts, the basic endowment insurance for senior citizens, basic medical insurance, unemployment insurance, work-related injury insurance and maternity insurance. In 2010, 178 million people in China were 60 years of age or older, accounting for 13.26 per cent of the total population. This number will double by 2030, Chen said. A CASS report in 2010 said China will overtake Japan to become the world`s most ageing society by 2030. By the end of last year, a total of 304.27 million working people, retirees and beneficiaries were covered by basic urban endowment insurance for senior citizens, an increase of 20.36 million from a year earlier, according to the MoHRSS. Among them, 45.43 million were rural migrant workers, an increase of 4.03 million from 2011. PTI