China Plans to Strengthen Social Security Fund Amid Growing Elderly Population
New Delhi: China is set to significantly bolster its National Social Security Fund, valued at 2.88 trillion yuan, to address the challenges posed by its rapidly ageing population. As the number of new births and the younger workforce dwindles, the government is prioritizing the expansion of this fund to ensure adequate support for its elderly citizens.
Ding Xuedong, the party secretary of the fund, emphasized the importance of this move, he highlighted the urgency of enhancing the fund as China enters a severe ageing phase, with approximately 300 million people expected to retire over the next decade—nearly equivalent to the entire population of the United States. By 2040, one in every two people aged over 65 in the Asia-Pacific region will reside in China, according to estimates by Euromonitor.
Established in 2000, the National Social Security Fund serves as a strategic reserve to meet the country’s social security needs during peak ageing periods. However, the Chinese Academy of Sciences has warned that the nation’s pension system could run out of money by 2035.
To mitigate this risk, Ding announced plans to expand pension fund investments, particularly in the domestic capital market. The fund will focus on long-term equity investments in strategic sectors crucial to the national economy and the livelihoods of the people of China. Additionally, the fund will increase investments in scientific and technological innovation, which are key government priorities. Ding also stressed the importance of transparency in financial disclosures to stabilize public expectations regarding old-age care.
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