The worldwide trend of ageing populations has generated a lot of debate about the economic problems they throw up. But it has so far failed to attract wide attention. Hong Kong's consultation on a goods and services tax was evidence of that. It fizzled out without too much concern about broadening the tax base to meet the future needs of a growing retired sector. Pension scandals get more headlines than the question of where the money will come from in the years ahead to fund the needs of more retirees. An example is the ever-widening probe into misuse of pension funds by senior officials and others. But Beijing is trying to focus attention on the real issue, and with good reason. Our report today on the State Council's white paper on care of the aged is a reminder that the ultimate welfare nightmare is to be found on the mainland. The mainland has already lost the race to become rich and modernised before it becomes an ageing society. It remains among low- to middle-income countries in terms of per-capita gross domestic product. But it expects the number of 'elderly' - people over 60 - to rise from 144 million last year in a population of 1.3 billion to 248 million by 2020. It will grow at an increasing rate thereafter, peaking at 437 million, or 30 per cent of the population, by 2051. Thanks in part to restrictive child-birth policies, the ratio of working people to retirees will drop sharply, leaving fewer younger people to finance the care of a growing number of older people. The ballooning welfare bill will not be cushioned by extraordinarily high savings, which the government wants to convert to higher consumer spending as an engine of economic growth and greater wealth. Thus, in the space of 25 years of reform, the mainland has gone from having a womb-to-tomb socio-economic regime to having a frightening welfare overhang. Escaping the shadow of that overhang goes to the heart of Beijing's emphasis on the maintenance of social stability and harmony. The discontent of hundreds of millions of elderly people with little left to lose could prove more than a little troublesome. Therefore, the central government can well do without an aged-welfare black hole at the end of people's working lives. Just how hard it will be to avoid one without a crippling increase in financial provision for social security is graphically illustrated by the white paper. The mainland's aged population accounts for one-fifth of the global total and half of Asia's. About 60 per cent of people over 60 are to be found in the countryside, where social welfare lags far behind. This is compounded by the migration of young workers to urban areas and an increasing trend of old people living on their own. There is a huge shortage of aged care, with only 1.49 million beds for old people in welfare institutions, or 10 beds per 1,000 old people. By 2010, the mainland wants to add 2.2 million beds for poor or disabled old people in rural areas. The critical year, according to state officials, will be 2030, when less than half the population is expected to be in the workforce. The acknowledgment that providing a welfare system for the aged in line with the nation's socio-economic development will put a strain on government finances is an understatement. The mainland needs to develop a coherent national pension plan under rigorous independent supervision that actually invests money across an appropriate range of securities and generates healthy but secure returns, rather than being looted by state officials. The national social security system is now forced to pursue super-conservative investment policies that won't generate the needed returns. Meanwhile, the policy of stimulating private consumption could help strengthen government finances if it unlocks savings to help build a bigger domestic economy. Private consumption has been growing in real terms at about 10 per cent a year. But mainland households may need to be assured of affordable health care, education and housing before they will spend much more.