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Pension gap exerts severe pressure

By Ma Jun | China Daily | Updated: 2012-12-12 08:31

Pension gap exerts severe pressure

China's colossal pension gap is expected to greatly increase its fiscal pressure and government debt risk because it faces an ever-increasing aging population.

If the country doesn't undertake necessary reforms, the shortage in pension for urban employees over the next 38 years would be an estimated 83 percent of its 2011 GDP. If rural residents are counted in, the government will face much greater fiscal pressure to bridge the big pension gap. Under the current pension system, three working people support one retiree, but this ratio is likely to change to 1:1 by 2050.

The drastic increase in medical expenses for outpatients, hospitalization, epidemic prevention, medical management and long-term nursing services provided for senior citizens will be another source of fiscal pressure and government debt risk for the government.

Pension gap exerts severe pressure

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