Pension reform in China: towards social investment

Abstract

This chapter by Joe Leung and Yuebin Xu discusses pension reform in China and questions whether the government’s pension policies effectively promote social investments that produce future benefits to elders. Facing the challenges of the ageing population, escalating pension payments and imminent declining workforce, China has to formulate a sustainable, adequate and affordable pension system. Using pension reforms as an example, this chapter illustrates that harmonizing pension reforms are regarded as the key instrument of social investment strategy to promote economic performance. Pension reforms are pivotal to restructure the labor market, facilitate labour mobility and integration across regions, occupational sectors, and rural and urban areas, as well as to enhance the quality of human capital. In short, a modernized economy has to be accompanied by a universal and equitable social security system. Key words: social investment, international social welfare, pensions, social protection, China