Pension crisis expected to plague China from 2023: report

(ECNS) -- Without reform, the pension fund in China would be unable to make ends meet by 2023, Southern Metropolis Daily reported, citing a report of the Chinese Academy of Social Sciences.

The body said in the report titled 'A Study of China's National Balance Sheet 2013' that the number of retirees would soar from 2010 to 2030, and hit its peak at 198 million in 2036, based on data from the 2010 demographic census.

Pension funds would not be enough to pay employees after their retirement from 2023, given the predicted increase in numbers.

Besides, the ratio of pension expenses against GDP is estimated to rise to 11.85 percent in 2050 from 2.73 percent in 2011, according to the study.

By 2050, the government must take action to fix the liability, or the gap between pension spending and pension income would reach 802 trillion yuan, accounting for 91 percent of GDP.

From 2030, huge amounts of fiscal subsidies must be granted as pension payments to keep the system running, the report said.

The research group predicted that by 2050, the proportion of fiscal subsidies as pension funds against GDP is expected to reach 8.46 percent, while the proportion against total fiscal expenditure would explode to 34.85 percent.

It was added that delaying the retirement age could be a good solution to slow down the pension system moving towards insolvency.

Another feasible plan would be to sell state-owned property, or rely on dividends harvested from state-owned assets.