Assessing the Financial Sustainability of China’s Rural Pension System
Considering the rapid growth of China’s elderly rural population, establishing both an adequate and a financially sustainable rural pension system is a major challenge. Focusing on financial sustainability, this article defines this concept of financial sustainability before constructing sound actuarial models for China’s rural pension system. Based on these models and statistical data, the analysis finds that the rural pension funding gap should rise from 97.80 billion Yuan in 2014 to 3062.31 billion Yuan in 2049, which represents an annual growth rate of 10.34%. This implies that, as it stands, the rural pension system in China is not financially sustainable. Finally, the article explains how this problem could be fixed through policy recommendations based on recent international experiences.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James, Estelle, 2002. "How can China solve its old-age security problem? The interaction between pension, state enterprise and financial market reform," Journal of Pension Economics and Finance, Cambridge University Press, vol. 1(01), pages 53-75, March.
- Boulier, Jean-Francois & Huang, ShaoJuan & Taillard, Gregory, 2001. "Optimal management under stochastic interest rates: the case of a protected defined contribution pension fund," Insurance: Mathematics and Economics, Elsevier, vol. 28(2), pages 173-189, April.
- Cremer, Helmuth & Pestieau, Pierre, 2000.
"Reforming our pension system: Is it a demographic, financial or political problem?,"
European Economic Review,
Elsevier, vol. 44(4-6), pages 974-983, May.
- CREMER, Helmuth & PESTIEAU, Pierre, "undated". "Reforming our pension system: is it a demographic, financial or political problem?," CORE Discussion Papers RP 1468, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Christian Gollier, 2007.
"Intergenerational Risk-Sharing and Risk-Taking of a Pension Fund,"
CESifo Working Paper Series
1969, CESifo Group Munich.
- Gollier, Christian, 2008. "Intergenerational risk-sharing and risk-taking of a pension fund," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1463-1485, June.
- Gollier, Christian, 2007. "Intergenerational Risk-Sharing and Risk-Taking of a Pension Fund," IDEI Working Papers 42, Institut d'Économie Industrielle (IDEI), Toulouse.
- Disney, Richard, 2000. "Crises in Public Pension Programmes in OECD: What Are the Reform Options?," Economic Journal, Royal Economic Society, vol. 110(461), pages 1-23, February.
- Aaron George Grech, 2010.
"Assessing the sustainability of pension reforms in Europe,"
case140, Centre for Analysis of Social Exclusion, LSE.
- Grech, Aaron George, 2013. "Assessing the sustainability of pension reforms in Europe," MPRA Paper 51474, University Library of Munich, Germany.
- Grech, Aaron George, 2010. "Assessing the sustainability of pension reforms in Europe," MPRA Paper 27407, University Library of Munich, Germany.
- Aaron George Grech, 2010. "Assessing the sustainability of pension reforms in Europe," LSE Research Online Documents on Economics 43865, London School of Economics and Political Science, LSE Library.
- Jin Feng & Lixin He & Hiroshi Sato, 2009.
"Public Pension and Household Saving: Evidence from urban China,"
Global COE Hi-Stat Discussion Paper Series
gd08-030, Institute of Economic Research, Hitotsubashi University.
- Feng, Jin & He, Lixin & Sato, Hiroshi, 2011. "Public pension and household saving: Evidence from urban China," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 470-485.
- Blake, David, 1998. "Pension schemes as options on pension fund assets: implications for pension fund management," Insurance: Mathematics and Economics, Elsevier, vol. 23(3), pages 263-286, December.
- Pfeffer, Jeffrey, 2010. "Building Sustainable Organizations: The Human Factor," Research Papers 2017r, Stanford University, Graduate School of Business.
- David Blake & Les Mayhew, 2006. "On The Sustainability of the UK State Pension System in the Light of Population Ageing and Declining Fertility," Economic Journal, Royal Economic Society, vol. 116(512), pages 286-305, 06.
- Igor Fedotenkov & Lex Meijdam, 2013. "Crisis and Pension System Design in the EU: International Spillover Effects Via Factor Mobility and Trade," De Economist, Springer, vol. 161(2), pages 175-197, June.
When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:6:y:2014:i:6:p:3271-3290:d:36507. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.