Beijing announced its pilot scheme of private retirement plans, with the participation of four large, state-owned banks, that will be launched in November in five cities. Chinese netizens expressed their distrust of the Chinese banks, and an economist said the plan is a way to cover up the failing economy.
The officials claimed the new retirement savings products will meet the diversified needs of China’s aging population.
Chinese netizens responded to the news with comments that showed widespread distrust of the program: “Just a trick to squeeze your wallet,” “Stop insulting my intelligence,” “My money is safer with me,” and “Nothing good will be shared with the people.”
State Pension Will Run Dry by 2035
In the 2019 “China Pension Actuarial Report 2019-2050” report, the Chinese Academy of Social Sciences (CASS) researchers estimated that the urban worker pension fund will be exhausted by 2035 due to a stagnant work population. That is, those born between 1980 and 1989 are likely to retire without any pension.Economist Li Hengqing believes that the CCP’s one-child policy (1980-2015) is the reason for the decline in the workforce and the rapid increase in an aging Chinese population.
Li explained that the number of participating enterprises is very limited, mostly the state-owned ones. “The private enterprises barely have the capacity to join the system,” he said.
The Dominos Are Starting to Fall
The collapse of the pension system will create major social unrest and be a challenge to the CCP’s governance.The push of private retirement savings is the latest effort of the regime to fill the gap in the balance sheet of the pension system.
Li pointed out that the mission of the pilot scheme of private retirement is to hold onto the last remaining savings it has in order to solve the crisis of a break in the monetary chain.