China plans to boost social security fund to tackle rapid population aging
Date
8/21/2024 8:36:01 AM
(MENAFN) China is set to significantly bolster its social security fund, currently valued at 2.88 trillion yuan (USD406 billion), as part of a strategic effort to prepare for the challenges posed by a rapidly aging population. With the number of newborns on the decline and a shrinking younger workforce to support the elderly, the government aims to make the National Social Security Fund "bigger and stronger." Ding Xiudong, an official with the fund, emphasized the importance of this initiative by highlighting that the fund must "effectively" respond to the aging population, and improvements in the policy mechanism for developing the elderly care industry are crucial to address these demographic shifts.
Over the next decade, approximately 300 million Chinese citizens, a number equivalent to the entire population of the United States, will reach retirement age. According to Euromonitor estimates, by 2040, one in every two people over the age of 65 in the Asia-Pacific region will be Chinese. This demographic trend underscores the urgency of expanding the social security fund, which was initially established in 2000 as a "strategic reserve fund for social security needs during the peak period of population aging and the burden of the country's social security system," as described by Ding. China has already entered a stage of moderate aging, and with severe aging anticipated in the next decade, the task of expanding and strengthening this strategic reserve fund has become more critical and challenging than ever before.
To meet these challenges, the fund will increase its investment in the local capital market, focusing on long-term investments in companies within strategic and essential sectors that are vital to the national economy and the well-being of the people. Additionally, Ding stated that the fund will place greater emphasis on investments in scientific and technological innovation and the promotion of new high-quality productivity. These priorities align with the government's broader goals, reflecting the increasing importance of innovation and economic sustainability in addressing the looming demographic crisis. Through these measures, China aims to ensure that its social security system remains robust and capable of supporting its aging population in the years to come.
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