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[NPC & CPPCC] Zhao Yaohui: Nationwide Overall Pension is On the Way

MAR . 21 2017

Peking University, Mar. 18, 2017: In January of this year, China’s “double-track system” of pension officially came to its end . It meant that nearly forty million government employees would start to pay for their own pension insurance, the amount of which is 8% of their salary. Public discussion about this reform is still heated, even though the plan has already been settled.

According to research, the fund of pension insurance is balanced, with a slight surplus. However, there are two structural conflicts: one is the transverse conflict that the regional distribution of the pension fund is not even; the other is the longitudinal conflict that the population aging is getting severer, therefore the payment of the pension fund will be under huge pressure in the future.

The NPC and CPPCC have had its eyes on the problem of pension as well this year. Haiwainet had a discussion with Professor Zhao Yaohui from PKU National School of Development about what course Chinese pension will follow.

Population aging is speeding up; Pension payment is under pressure

Haiwainet: Apart from the challenges that the system of pension payment is facing, the over-65 population has exceeded 150 million and is still increasing fast; the development of the economy has entered a decreasing stage. Under such circumstance, what solution do you think can reduce the stress of the current situation?

Zhao: Now there are not many provinces facing the stress of pension payment, but the stress will be heavier and heavier. There are many young people who only pay but have not received the pension due to their age. The young will be old, and then the stress will be heavier.

Actually, the world is faced with the same problem. And the solutions of each country are nearly the same: either cut down or delay pension. Since the large portion of the “social insurance and housing fund”, which is paid by young people, is the pension, our country should not depend on levying more money.

Haiwainet: Many experts consider delaying retirement as a solution of population aging. But the controversy of this advice is still huge. What do you think of it?

Zhao: In terms of the balance between paying pension and levying money, delaying retirement is an irresistible general trend.

Coordinating pension nationally is beneficial for social justice and the flow of talent

Haiwainet: What do you think are the advantages of coordinating pension nationally?

Zhao: The coordination will speed up  population flow. Since the pension insurance is almost the same in all places, people are willing to go to other places to work. On one hand, it protects social justice; on the other hand, it will enhance the efficiency of economic operations.

Being alert of poverty in old age and the difference between urban pension and rural pension

Haiwainet: As for the poverty in old age, do you think there is any solution to it?

Zhao: Poverty in old age is very serious, and it will become the major poverty in the future. The major cause of it will be old age or health problems. And they cannot receive any significant income due to their declining ability.

Haiwainet: Another hot issue is about the idea of caring for the old. Some people think that old people should have their own life instead of waiting for the care of their children. What do you think of this view?

Zhao: There is such a conflict between generations. And some old people have already realized such a problem. Because children do not have so much time, the traditional filial piety will not be an important reason on which old people could rely to ask children to care for them. This is the reality.

Written by: ZhongYaoqiong
Edited by: Xu Liangdi
Source: PKU News (Chinese)