CHANGE: China slides faster into pensions black hole.
Guo, though, is fortunate because he also has the financial support of six children. But for younger and future generations of retirees, China’s traditional family safety net is disappearing, replaced by state-backed pension schemes tailored for a graying society.
Policy makers and economists have long been worried about the financial burden of China’s expanding patchwork of pension schemes, but those concerns have recently escalated as its rural pension scheme took off in the past three years.
The funding shortage is daunting: economists say it could blow out to a whopping $10.8 trillion in the next 20 years from $2.6 trillion in 2010, towering over China’s $3 trillion onshore savings, the biggest hoard of domestic savings in the world.
Time is not on China’s side. Its fast-maturing society and economy — thanks to a one-child policy and a rapid rise in living standards — demand better pension coverage in future.
Yet China is already straining to hold things up.
It’s not going to get easier.