Aging Chinese Face a Welfare Gap

Article excerpt

The state welfare system is being dismantled, but a new pension scheme is not yet ready to take over

Liu Cunwa used to be a farmer in Sujiakou Village in north China's Shanxi Province. Now in his seventies, no longer able to work and with no children to take care of him, Liu begs or waits for hand-outs from villagers to get by.

Like millions of other elderly in the world's fastest aging developing country, Liu has fallen through the gaps as the state-run cradle-to-cremation welfare system is being dismantled and a new old-age pension regime based on Western models is slowly being built.

The government will have to work fast to fill the gaps. China is the world's fastest aging developing country. Within the next 30 years, there will be an estimated 275 million people - more than the present total population of the United States - in China over the age of 60. That will mean roughly one in five people will be in retirement or close to it. As a result of a one-child family policy aimed at stopping the country's explosive population growth, the financial burden will become heavier for the shrinking proportion of working people.

Pension reform: a high priority

Traditionally, the aged could rely on the support of their children and grandchildren. After China's 1949 communist revolution people like Liu were guaranteed food, clothing, medical care, housing and burial expenses through the collective farm.

Under the free-market reforms begun in the late 1970s, Chinese rural families are once again independent farmers. While the move to private farming has made many parts of rural China rich, it has also left the aged once again dependent on either their families or themselves. …

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