China says it has US$726 billion pension fund surplus

Beijing seeks to allay fears it does not have enough money to cover the costs of a rapidly ageing population

‘Everyone should rest assured that we will be able to guarantee that basic pension funds are disbursed on time’, vice-minister says

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China is facing what experts a so-called demographic time bomb as its elderly population grows and its workforce dwindles. Photo: AFP

Published: 3:48pm, 20 Jul 2019Updated: 3:48pm, 20 Jul 2019

China’s state pension fund surplus stood at more than 5 trillion yuan (US$726.7 billion) in the first half of 2019, a government official said as Beijing tries to allay fears that it will be unable to deal with the costs of a rapidly ageing population.

China is facing what experts are calling a “demographic time bomb” as its elderly population grows and its workforce dwindles, partly as a result of a one-child policy that was in place for about four decades.

After an official research report showed China’s total pension pot could be “insolvent” as early as 2035, government officials have sought to reassure the public that their pensions will be guaranteed.

“Everyone should rest assured that we will be able to guarantee that basic pension funds are disbursed on time and in full, not only at present but over the long term,” You Jun, vice-minister for human resources and social security, said at a briefing on Friday.

An official report said China’s pension pot could be insolvent by 2035. Photo: Simon Song

While state measures aimed at reducing the tax burden on enterprises had resulted in falling contributions, China had also set up a strategic social security fund reserve and increased the contributions made by a central government endowment scheme, he said.