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Aging population a major challenge

By Xie Chuanjiao (China Daily)
Updated: 2007-03-12 06:49

China faces the problem of aging population more than any other country, with the number of people above 60 expected to cross 400 million by 2045, political advisors warned over the weekend.

China is "already the only country with an aging population of more than 100 million, and their number is growing even faster", said Zheng Silin, deputy director of the Subcommittee of Population, Resources and Environment of the Chinese People's Political Consultative Conference (CPPCC) National Committee.

By the end of 2005, there were 144 million people aged 60 and above, or 11 per cent of the total population. This figure is likely to triple in less than 40 years, a process that could take hundreds of years in many other countries.

"Even worse, since we have just become a moderately rich country our finance resources are quite limited," said Zheng, who is also former minister of labor and social security.

"The centrally planned economic system from 1949 till the late 1970s didn't have a provision for any pension fund, and that created a heavy burden for the government today."

Senior citizens in rural areas face even more difficulties because of the backward economic development and long-term urban-rural, dual structure, he said.

Yang Kuifu, another deputy director and former vice-minister of the National Population and Family Planning Commission, said: "Little social security system has been set up in the countryside Only a small number of pilot endowment insurance projects started in the early 1990s exist, and they rely on individual farmers' budgets. And though they are continuing, they need adjustments."

The traditional family-based old-age support system, too, was facing challenges, Yang said, asking governments at various levels to shoulder their responsibilities and help elderly farmers.

Besides the mammoth fund burden, aging population has also created other social pressures, including the rising demand for healthcare.

Zheng said medical resources needed to take care of senior citizens were three times, or even more, than that of other age groups. But despite all the difficulties, he and other officials assured the elderly that they would be cared for.

Last year, 46 million senior citizens received pensions worth more than 500 billion yuan ($62.7 billion).

In the Government Work Report delivered to the National People's Congress on March 5, Premier Wen Jiabao said this year the central government would spend 201.9 billion yuan ($25.5 billion) on social security, that is, 24.7 billion ($3.3 billion) more than last year.

"The government budgets for endowment and healthcare insurance are increasing, and the strategic pension reserves have gone up by another 270 billion yuan ($33.8 billion). All these will contribute ultimately to the well being of the senior citizens," Zheng said.

Progress has been made in cooperative healthcare pilot programs in rural areas since 2003. They had been extended to 1,451 counties by the end of last year, covering 410 million of the 900 million rural residents.

Last year, the country launched a nationwide pension and subsidy scheme for families with one child or two daughters in rural areas because they are not as "lucky" as those with sons to rely on when they get old.

Each of the 1.8 million rural couples received 1,200 yuan ($152) last year. Farmers welcomed the policy because the money often was a relief in areas where people have little income, except for the crops they grow.

The government's family planning policy is a necessity because the Chinese mainland would have faced "more urgent and more serious problems" had it not been implemented.

It's necessary to apply the reverse mortgage method gradually to supplement the shortfall of pension funds, which means senior citizens would have to mortgage their property to financial institutions that would then provide monthly payments.

But before the method is applied many preparatory issues, such as related laws, evaluation system and calculating the impact on the real estate market, have to be studied properly, Zheng said.

(China Daily 03/12/2007 page2)



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