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Document Abstract
Published: 2013

Pension coverage in China and the expansion of the New Rural Social Pension Scheme

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In just over 60 years, the pension system in China has changed from a residual policy issue in the shadow of major economic reform, to one that is now intrinsically linked to socio-economic transformation in China and underpins the transition from an export-driven to a consumption-based economy.

This briefing aims to summarise the development of the pension system in China, and hopes to be used as a resource and as a case study for countries undergoing pension reform to improve coverage.

Key points:

  • China has achieved unprecedented improvements in its pension coverage in the last five years. Since its introduction in 2009, 89 million people have started receiving pension payments under the New Rural Social Pension Scheme. Combined with those receiving payments under other pension schemes, this means that 125 million people, or 60 per cent of those aged 60 and over, now receive a monthly pension. The proportion of people enrolled in a pension almost doubled between 2009 and 2012, from 30 to 55 per cent
  • the nature of pension policy in China is in transition, moving away from a historical focus on formal-sector workers to having an emphasis on universal coverage of formal and informal workers alike. The pension system is now being seen as central to the country’s social and economic policy. Furthermore, it is viewed as an important part of inclusive growth, as well as being essential to China’s transition to a consumption-based economy
  • recent progress is attributable to a number of factors, including a move away from selective schemes to universal approaches, greater investment from central government in financing minimum income security in older age, and the political will demonstrated by the inclusion of coverage targets in national development plans
  • despite this impressive success, challenges remain. Coverage of the working-age population is still far from universal and inadequate pension benefits, the continuing complexity of the pension system, portability of pension rights and sustainability in the face of a rapidly ageing population remain a concern


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A. Vilela

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