China is set to enhance its social security fund, currently valued at 2.88 trillion yuan ($406 billion), to make it "bigger and stronger" in response to its rapidly ageing
population. With the country's birth rate declining and the number of younger workers shrinking, the need for robust support for retirees is becoming increasingly urgent.
Ding Xuedong, Party Secretary of the National Social Security Fund, emphasized the importance of this initiative in comments published by the Communist Party newspaper, Study Times, on Monday. He highlighted that the fund will play a crucial role in addressing the challenges posed by an ageing society and in improving the policy framework for the elderly care industry.
Over the next decade, approximately 300 million Chinese citizens are expected to retire, a number 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" for social security needs during peak periods of population ageing, acting as a stabilizing force for China's social security system, Ding explained.
China has already entered a phase of moderate ageing, with severe ageing anticipated in the coming decade. Ding warned that the challenges of expanding and strengthening the strategic reserve fund are "unprecedented" in their urgency and complexity.
The Chinese Academy of Sciences has projected that the country's pension system could run out of money by 2035, underscoring the need for immediate action.
To address these challenges, the fund will focus on improving and expanding pension fund investments. Ding stated that the fund will "actively disclose important financial information to the public" and will conduct investments in an "open and transparent manner." These disclosures are intended to reassure the public about the stability and reliability of old-age care provisions.
The fund will also increase its investments in the domestic capital market, with a particular focus on long-term equity investments in strategic sectors that are vital to the national economy and public welfare. Additionally, there will be heightened investment in scientific and technological innovation and the development of new, high-quality productivity areas, which are key priorities for the Chinese government. Photo by 志涛 张, Wikimedia commons.
