Towards Equity and Sustainability? China’s Pension System Reform Moves Center Stage

Abstract

In this paper I review the latest development of China's public pension system. Last several decades saw China's tremendous achievement in various public pension reforms. Especially since the 11th Five-Year Plan (2006-2010), reform has accelerated. By 2019, the public pension system in China has covered almost one billion adults, which makes it the biggest pension system in the world. Together with the expansion of Dibao (Basic living allowance) and the eradication of poverty, the development of pension system has become the top agenda in current policy making of the Chinese government. Yet, challenges exist: unequal distribution of pension resource and the long-run unsustainability of the pension system are waiting to be addressed with increasing urgence. Although potential countermeasures, both based on international experience and with Chinese feature, has been proposed and piloted in both regional and national level, there are incremental pressure for further reforming the system. In the latest Five-Year Plan (2021-2015), the government has vowed to construct a unified, equitable, and sustainable pension system with full coverage. This is a very challenging yet exciting goal to achieve not only for the policy makers, but also for academic researchers and general public.