Most urban dwellers have been eligible for pensions since 1951, but rural pensions weren’t enacted until much later; as in all developing countries, rural families lived off the land and were supported by relatives.
But rapid urbanization and rural land grabs have jeopardized the retirement security of elderly Chinese in the countryside. The share of China’s population over the age of 60 is now 185 million, and will nearly double by 2030. A recent study estimated that over the next 20 years, the government will have accumulated $10.9 trillion in pension liabilities.The problem is large, but so is China's economy and the Chinese have been expanding their economic influence in developing countries throughout the world, presumably to earn income to help pay some of these age-structure related costs. It was the advantageous age structure that helped the economy, and now the economy has to come to the rescue of the elderly who worked hard and had small families. One solution, resisted everywhere of course, is to raise the retirement age, which is currently 55 for women and 60 for men (well younger than in the US). But, as Frazier notes, another huge issue is the set of inequalities deeply entrenched in the country.
An enduring source of inequality in China has been the curse of geography: where you were born, lived and worked has largely determined the level and even existence of your retirement benefits. Reducing the urban-rural gap — as China this month announced a plan to do — is essential, as is saving elderly citizens from poverty.