Pension reform in China: what can China learn from the Danish approach to demographic change?

Abstract

This study addresses two questions: first regarding China’s ability to respond to its rapidly ageing population, and second what China can learn from Denmark in their approach to this challenge. Denmark, along with the other Scandinavian countries, is generally considered well adapted to demographic change. This paper aims to examine if the experiences of Denmark can add insights that are useful for the development of a sustainable and financially responsible approach to population ageing in China. Reviewing the respective demographic challenges of both China and Denmark, together with the provisions of old-age security and care, this paper presents an examination of their adaptability to demographic change. Finally, the paper outlines three factors from which China arguably could learn from the Danish approach to demographic change. It is evident from studying the Danish approach to demographic changes that pensions are not the sole focus; stimulating labour force participation, creating initiatives to postpone retirement and work longer and enforcing pro-natal polices are all part of the solution. Due to this, this paper argues that the main lesson to be learned from Denmark is that there is a need for a holistic approach to demographic change; reforming the pension system is only one part. Keywords: China, Denmark, universalism, demographic change, pensions, old-age dependency