JI Rui: Public Finance and Pension Reform in China
During the society and economy development, China’s demographic transition has attained some new features, that is, the birth rate is kept low while people’s average life span is prolonged bit by bit. According to a report by the World Health Organization, the average life span for men is 71 and for women is 74.5 in 2008 in China, compared to this, the average life span is only 68 years in Population Census in 1990, and the aging population above 60 accounts for more than 10% of the overall population. While the per capita GDP is only about $3000 in 2008, so this means that China is growing old before it can grow rich. Besides, China’s aging problem is of a large size and accelerating rapidly. According to a forecast by the World Bank, the aging population above 60 in China will account for a quarter of its overall population by 2050. Therefore, China is facing an unprecedented challenge of aging. Meanwhile, China is rebuilding its pension system from pay as you go type to funded type and has a large demand for pension fund. The rapid changes of population structure lead to a contradiction between the demand and supply of pension.
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