Elderly people exercise at Yuyuantan Park in Beijing on April 18, 2021. Photo: IC Photo.
Experts have said an aging population could lead China to have more deaths than births in 2022, 12 years earlier than predicted by the UN. They suggested strengthening commercial insurance to support the elderly given the current inadequacy of the old age protection system.
Chinese people over the age of 65 surpassed 14 percent of the total population in 2021, which is an important indicator and means the country has officially become an aging society, said Zheng Bingwen, director of the Center for International Studies on social security at the Chinese Academy of Social Sciences.
Zheng pointed out at the Tsinghua PBCSF Global Finance Forum on Sunday that in 2000, China entered an aging society when its elderly population ratio reached 7% and it took only 22 years for Chinese society to move from “ageing” status to “aged” status. , a much shorter period of time compared to some developed countries like France, the United States and Japan which spent 115 years, 69 years and 26 years respectively on the transition.
With China set to become super-aged in 2035 when more than 20 percent of its population will be over 65, Zheng warned of the growing burden on young Chinese to support the elderly.
“China’s dependency ratio was 17.9% in 2020, which meant that about six young people were needed to support one old man. But the ratio could exceed 43% in 2050, which means that each old man will only have 1.3 followers,” Zheng explained.
Considering the current inadequate and unbalanced old age security system, experts suggested the public should pay more attention to the unique role of commercial insurance, as it is developing very rapidly.
Zhou Yanli, former vice president of the China Banking and Insurance Regulatory Commission (CBIRC), said China has established an old-age security system that mainly consists of three pillars: the basic pension covering workers and residents of towns and cities, annuity covering employees of government-related businesses and institutions, and commercial endowment insurance.
“The system is mainly based on the basic pension which cannot cover the rural population. The annuity of enterprises and government-related institutions also has a very limited scale, and commercial endowment insurance as the third pillar has only just begun to develop,” Zhou said.
Pan Yanhong, chairman of China Pacific Life Insurance, said the development of the third pillar has accelerated amid China’s pension funding gap expected to reach eight to ten trillion yuan within five to next ten years.
“The government has introduced the top-down design for the construction of the third pillar in 2021. Chinese insurance regulators have also promoted pilot projects on commercial capitalization insurance financial products, which are expected to expand the pension market space. personal,” Mr. Pan said.
“We need to mobilize multiple market players to participate in retirement financial services and provide the long-term retirement insurance that the elderly need,” Zhou added.