Pension payments became available to the majority of the population in China only after 1997. Today, citizens aged 50-60 years and with 10-15 years of experience can count on them. The minimum pension in China is 88 yuan (hereinafter ¥), 12.44 dollars ($) or 795 rubles (₽), and the average is from ¥127 to ¥2500. This difference is explained by the fact that charges depend on where a person lives - in a city or village.
How many pensioners are there in China?
The population of a country is considered old if the number of elderly people in it is 7%. In China, the number of people over the age of 60 is 250 million or 17%. The country has entered an active phase of aging.
The number of such people will only increase every year, but the working population will not. This is due to the consequences of the adopted law controlling the number of children in a family - no more than one child.
Now the government is trying to change the current situation and is adopting various programs aimed at increasing the birth rate and rejuvenating the population. The aging of the nation in the country puts significant pressure on the economy, because Contributions to the pension fund of each worker are divided among several pensioners.
Pension crisis
Today, China's pension system is in dire straits, largely due to the once-promoted political doctrine of "one child per family." And because, on average, the life expectancy of Chinese people in the country has increased.
It is impossible to even compare how many of the population are Russian pensioners in Russia and Chinese in their homeland, because there are already more of them than the entire population of the Russian Federation combined, and so far there are more and more of them every year. Thus, the Chinese nation is aging, and this puts great pressure on the economy, because each young employee makes pension contributions, which are distributed among several people.
Expert forecasts agree that by mid-century there will be fewer than 2 able-bodied Chinese per pensioner, so the authorities are considering increasing the retirement age by five years. But there is another reason that complicates the situation with pensions: the Chinese are distrustful of all kinds of funds.
The population prefers to keep savings at home, despite the fact that there are fines for this and constant monitoring is carried out. Many organizations also try by all means to hide their full income from the authorities. All this has led to pension funds losing billions of money every year.
There is also a problem in the work of government agencies dealing with pension issues, as the number of people retiring in China is steadily increasing. They do not have time to cope with such a quantity, so the authorities are also planning to carry out reforms in this sector.
China's pension programs and system features
According to the traditions existing in the country, caring for elderly parents is the responsibility of children and grandchildren. When there is only one child in a family, this can be quite difficult to achieve. Realizing this, many sought to circumvent the law and have two or more children. This violation was most often observed in rural areas.
The pension system appeared after the formation of the People's Republic of China in 1949, but it was intended only for civil servants and employees of enterprises who had worked there for 15 years. Only 6% of the population could use it. Changes in political course, an increase in the number of elderly people, the collapse of communes - all these factors have led to the need to revise the current pension system. The reform was carried out in 1997. Since then, more people have been entitled to benefits.
In 2021, slightly more than half of the older generation received pensions. This is due to the current system in the country that divides all people into urban and rural residents. It was introduced to curb internal migration and distribute the population evenly. It does not allow farmers to move to the city, register officially and work there. Only those organizations that pay salaries in envelopes are suitable for this.
Such employment does not add length of service and does not increase the size of a future pension.
The current situation with a constant increase in the number of elderly people and an increase in life expectancy requires further reform of the pension system. Officials offer various options, but the ruling party does not want to use drastic changes and focus on Western experience. The main priority should be to improve the well-being of pensioners. An increase in payment amounts leads to an increase in their consumption and ensures economic growth.
Prospects for the development of the pension system
Reforming China's pension reform is an urgent and extremely important task for the future of domestic policy. Chinese officials have repeatedly made various proposals to improve the modern system of payments to pensioners. The most popular of them are:
- A smooth increase in the retirement age in two or more stages.
The issue of raising the retirement age to 62 years for Chinese pilots has been raised more than once. Experts on Chinese domestic policy say that it is planned to increase the retirement age by profession and type of employment. First of all, the retirement age will be raised for teachers, doctors and social workers. The plan is to bring it to 65 years. - State pension provision should cover the entire population of China.
Although pensions are being paid to more Chinese citizens every year, at least 75 million people receive no pension contributions beyond a tiny minimum pension. This is due to the difficulties of obtaining social insurance for rural citizens and the reluctance of many employers to pay a percentage of their salaries to the Pension Fund. - Creating a reserve fund for additional pension expenses.
As the experience of the neighbors of the People's Republic of China and foreign countries has shown, the reserve pension fund is a guarantor of payments to the population in the event of, for example, unsuccessful investment of the funded part of the pension or an increase in the level of inflation in the country. It creates a safety net for the country's elderly citizens, who can be confident in the safety of their pension. - Reformation of the hukou registration system.
In particular, expanding labor opportunities in the legal field for rural residents. The hukou system creates a number of privileges for urban residents and seriously infringes on the rights of rural residents. Despite the fact that there is no talk of abolishing the hukou system, the issue of simplifying the process of obtaining urban registration and expanding rights for rural residents has been raised.
There are many ways to modernize: increasing social funds for pensioners, increasing the percentage of payments to the Pension Fund or establishing a tax for employers, eliminating the difference between the pensions of government employees and private sector workers, as well as minimizing the difference in pension payments by region.
China's communist agenda implies a special vector for the development of pension reform, which excludes sudden changes, focusing on the experience of the West, or abandoning the decisions made by Mao Zedong. However, given China's booming economy and low unemployment rate, successful pension reform may take place in a short period.
Retirement age in China
China uses a classic pension system. It can be used by men over 60 years of age and women over 55. The age is reduced by five years for any person who has worked in hazardous conditions for 10 years. In recent years, a pension has been paid to one in four elderly Chinese.
There is widespread information on the Internet that China plans to lower the retirement age. An appeal to official resources shows that everything is exactly the opposite. In the country, the retirement period is gradually increasing and for the majority of the population by 2048 it will be 65 years (there will be no differences by gender).
Problems with China's pension system
What are the problems with the Chinese pension system? First of all, this is due to the demographic miscalculation of the 70s of the last century. It was then that the birth control law was introduced, which in one generation seriously reduced the percentage of youth and aged the Chinese population. To pay the pension of one elderly resident of China, two middle-aged citizens will soon work.
Also, Chinese officials have repeatedly raised the issue of raising the retirement age. The threshold of 60 years for men and 50-55 for women was set in the years when the average life expectancy in China did not exceed 60 years. At the moment, the state pays pensions on average for 20-25 years - this is an important budget item. Despite the fact that the Communist Party has not yet presented a project to raise the retirement age, it is known that this process will drag on for at least 3-5 years. Chinese officials have repeatedly emphasized that raising the retirement age should occur in stages.
Who can receive pension payments
Employees who have reached a specified age and have the required length of service retire:
- civil servants, employees of municipal institutions - at least 10 years;
- other segments of the population –— 15.
During working life, contributions to the pension fund were required. Failure to comply with these conditions means non-receipt of assistance from the state.
The amount of payments differs in different places of residence and is:
- 20% of the minimum salary received in a particular city;
- 10% in the village.
Is there an old age pension in China?
Regions may change the retirement age. This is influenced by the number of people living in a particular area and the amount of subsidies received from Beijing. The amount of an old-age pension for any person depends on:
- his place of residence;
- the amount of salary received;
- transfers to the Pension Fund;
- the profession in which he worked.
The pension consists of two parts:
- Basic or basic: with 15 years of experience, the amount is calculated based on the average salary, applying indexation to it. They pay for the rest of your life.
- Cumulative: the entire transferred amount in the Pension Fund is divided by 120. It is paid back within 10 years.
Interesting from BBQcash: if a person does not have the required experience, and the established age has reached, then he can:
- delay retirement;
- pay the required fees;
- receive the entire transferred amount from the pension fund in a lump sum with interest.
This does not apply to peasants, whose payments are subsidized by the state. Their pension amounts are extremely low.
Number of pensioners in the country
The problem of a large number of old people is becoming more acute for the state apparatus. A large number of elderly people who need financial assistance can no longer rely on the tax contributions of the working population, due to its sharp reduction. After the UN summit in Japan, it is known that in China the number of pensioners is 10% of the population. If we take into account that the number of children under 14 years of age is around 30%, then it can be argued that there are extremely few able-bodied citizens in the country.
The problem cannot be solved by 180 million elderly people who need social security from the state. A huge share of the budget goes only to paying the minimum number of obligations. Despite the fact that the government is organizing actions aimed at regulating the birth rate, the process of aging of the population is proceeding faster and faster.
Amounts of pension contributions
Official employment of a person involves the transfer of contributions to the Pension Fund for the funded part:
- employer - 20% of the total accrued salary;
- employee – 8% of the amount he receives.
This is especially important for the private sector. In government organizations, transfers are made automatically, so their employees do not need to do any reporting. In some areas of China, enterprises form the savings of their employees themselves, from which they are later paid a pension. The amount of payments depends on the amount collected by the employee during his work.
There is no fixed amount for transfers for the main part of the pension. Its size depends on the official average salary in a particular area and is equal to 25% of it. Such contributions are made for 15 years, otherwise the employee will not be able to receive social insurance.
Average pension in China
The average pension in China in 2021 was:
- ¥2,500 (₽22,573 or $353.45) - in the city;
- ¥127 (₽1146 or $17.96) - in rural areas.
The amount received in the village is very low and is not enough to provide even the most basic necessities. In the city, deductions are higher, but prices are also higher, so a pension here also does not allow the Chinese to lead a comfortable life. The average payment depends on the average salary, so it differs in different cities:
- 4100 yuan (37 thousand rubles) - in Tibet;
- 3500 (31.6) - in Shanghai and Beijing;
- 1820 (16.4) - to Chongqing.
Minimum pension in China
In 2021, residents of rural areas received the minimum. This amount is equal to 88 yuan or about 795 rubles. City residents are paid more - 618 or 5.6 thousand rubles. In 2021, they plan to increase pensions by at least 5.5%. Different levels of pensions received push older people to move to other regions:
- to the southern regions, where the climate is warmer, food and utilities are cheaper;
- deep into China with significantly lower taxes.
They do not change their registration so as not to lose the payments that were accrued to them.
Pension amount
The modern system is based on the employee's monthly contribution to the fund. The size of this contribution can reach 20% of salary. Of this, 8% is paid by the employee himself, and the remaining 12% is required to be paid by the employer. Increased investment amounts should make it possible to close the gap in the budget caused by the demographic problem.
In 2021, the Chinese government decided to increase the minimum payments for civil servants and employees of independent enterprises. Payments will be increased by 5.5% compared to 2021. The change will affect the entire territory of the country, cities and villages.
The size of the pension in China is influenced by the locality in which the person works. So, a resident of a small village is paid 618 yuan (6180 in rubles). The same pensioner living in a large metropolis, Shanghai, will receive 7 times more, namely 3500+ yuan. Why such injustice? But if you take into account the difference in prices for utilities and food, everything falls into place.
*Residents of medium-sized cities with a population of less than 10 million are paid 2,000 yuan (20,000 in rubles) per month.
What is enough for a pension in China?
The size of pensions varies between rich and poor regions, sometimes by eight times. An amount of 55 yuan is enough for 4 liters of peanut butter or 20 kg of rice. Gasoline prices are higher than in Russia. In rural areas you cannot live on the pension you receive, so most often children help there. They either send money or bring the parents to live with them. Families live together or rent separate housing for parents. There are social forms of employment for older people.
In 2014, a decree on social benefits was adopted, intended to:
- families whose income is below the subsistence level;
- elderly people in need of constant care;
- children;
- seriously ill.
This document contained information about special subsidies available to the poor for:
- medical services (includes acupuncture and massage);
- visiting diagnostic rooms;
- payment of utilities;
- other types of temporary social assistance.
Old people can eat for a small fee in public canteens, practice qigong and tai chi in parks, and visit museums for free. Travel agencies provide special benefits for retirees, which, combined with the small requests of the Chinese, allow them to travel around the world. In recent years, nursing homes have been appearing in China, where care is provided at a decent level.
The Chinese differ from the old people of Japan and Europe in their traditions, way of life, and undemandingness towards material goods. For them, approaching retirement age is an opportunity to spend more time communicating with family and friends, and taking care of them allows them not to think about the little things. Children help them live out their allotted time without worries by looking after their elderly parents. They feel freer, engage in their favorite hobbies, and improve themselves.
Russian pensioners on the border with China
Elderly people in the Russian Federation living on the border with China prefer to sell or rent out their homes and move there. Real estate prices there are several times lower than in Russia. Once a quarter they return to their homeland and receive their due pension.
They choose to live both in the cities closest to the border and in Harbin with its mild climate, where Russian settlers gravitated to during the Civil War.
Utilities, prices for food and things are much cheaper than in Russia, which allows Russians to live peacefully on the payments they receive. They are attracted to Chinese medicine with its specialization in acupuncture, physiotherapy, cupping and rubbing. It is based on the use of natural products. Medicine in China is very developed and meets people's expectations. The health of many improves and attracts others to it.
