China Needs a National Pension System: Caixin

China posts a high savings rate, but the country needs pension reforms. Some workers do not receive benefits to which they are entitled. The median age is 37.3 and with a low fertility rate and improved health care, the population is aging. Caixin describes the pension system in crisis and need for national coordination with fair distribution among provinces – “an inevitable requirement for the rational allocation of labor resources in a market economy, a yardstick by which the state’s ability to govern is measured, and is also inseparable from citizens’ freedom of movement and their right to freedom of employment.” Seven provinces including Beijing and Guangdong are contributors; 20 are beneficiaries with some posting huge deficits. Urban employees contribute 16 percent of wages. “The situation where the stronger continue to get stronger and the weaker continue to get weaker is difficult to change all at once,” the Caixin editorial notes. “The national pooling of pensions has brought about a collision between local interests and national interests.” Solutions include preventing moral hazards deficits and possessive attitudes. Recommendations include provinces coordinating procedures and adopting unified pension insurance. The country could also adjust fertility policies, transfer of state-owned assets and increase the retirement age – YaleGlobal