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The Chinese pension reforms

In the last 20 years, China's pension system has undergone dramatic transformation

© getty images

The Chinese pension reforms

In the last 20 years, China's pension system has undergone dramatic transformation

Farmers’ dignity

In China, 700 million people live in the countryside, and the pension system is distinct from the urban one. In 2009, the People’s Congress made it mandatory for farmers over the age of 16 to contribute to an individual pension account. Until then, participation was voluntary and only 9% of the rural population was covered.

At the same time, the Congress earmarked 4 billion RMB ($587 million) to provide a pension of 55 RMB ($8) a month to retired farmers. “That may not sound a lot, but it is not so much a matter of survival as dignity,” says chairperson Wang. “Normally, the elderly can depend on sons to provide food and housing, but their voice within the family is diminished if they no longer contribute income.”

The cash flow ensures the standing of retirees within the family and maintains the harmony and stability of the family. The program will initially be piloted in 10% of the countryside, and gradually broadened to other places.

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