China plans to enhance its 2.88 trillion yuan ($406 billion) social security fund, aiming to make it 'bigger and stronger' to support its rapidly ageing population as the number of new births and the younger workforce to support the elderly diminishes. The National Social Security Fund will 'effectively' address population ageing and 'improve the policy mechanism for the development of the elderly care industry,' according to the fund's party secretary Ding Xuedong, who made these remarks in the Communist Party newspaper, the Study Times on Monday.
In the next decade, approximately 300 million Chinese are expected to retire, nearly the equivalent of the entire US population. By 2040, Euromonitor estimates that one in every two people aged over 65 in the Asia-Pacific region will reside in China. Established in 2000, the fund serves as a 'strategic reserve fund for social security needs during the peak period of population ageing and the ballast of my country's social security system,' Ding explained.
China has already entered a moderate ageing stage, with severe ageing anticipated in the coming decade, indicating the 'urgency and difficulty of expanding and strengthening the strategic reserve fund are unprecedented.' The state-run Chinese Academy of Sciences predicts that China's pension system could run out of funds by 2035. Ding stated that the fund will enhance and expand the scale of pension fund investments, 'actively disclose important financial information to the public' and conduct investments in an 'open and transparent manner.' These disclosures aim to stabilize people's expectations regarding old age care.
The fund will increase investments in the domestic capital market, 'increasing long term equity investments in strategic and basic areas related to the national economy and people's livelihoods.' Investments will also be increased in scientific and technological innovation and new quality productivity, which are key priorities for the government, according to Ding.
