China’s young people fear ‘miserable retirement’ with state pension fund predicted to dry up by 2035
- Rapidly ageing population and shrinking workforce mean net contributions will start to decline in 2023, according to Chinese Academy of Social Sciences study in April
- Government has already transferred 600 billion yuan (US$87 billion) in equity to the fund, but people are taking out private pension plans from as young as 20s
Like most of his Chinese peers born in 1990, Gustav Wu is the only child in his immediate family. Raised in a middle-class home in Shanghai, Wu went to an elite university and joined a well-run company after graduation. His parents were able to buy him a flat a few years ago.
Comfortably situated, there seemed nothing for him to worry about in the near term. However, since 2015, Wu has become increasingly concerned about his government pension after he learned that the fund is projected to run out before he retires.
“I am the only child in my family and I have to support my parents when they get old. I don’t want my retirement life to be miserable,” said 28-year-old Wu.
In April, Wu bought a pension insurance policy in Hong Kong, costing US$10,000 annually for five consecutive years, although this is seen as a rare move among his peers to begin preparing for retirement at such a young age.
I am the only child in my family and I have to support my parents when they get old. I don’t want my retirement life to be miserable