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China Daily Website

Higher age for retiring urged

Updated: 2013-04-09 00:03
By Zheng Yangpeng in Boao, Hainan ( China Daily)

China should adjust its family planning policy and raise the retirement age to address the issue of its aging population, the former national social security fund chairman said on Sunday.

Dai Xianglong, who resigned from the position in March, also said at the Boao Forum for Asia Annual Conference in Hainan province that a wording change in the 12th Five-Year Plan (2011-15) implied the central government has a nuanced attitude toward its long-standing family planning policy.

"Some say the State should allow parents to have a second baby if one of them is a single child. I think this kind of minor change will take place in the next two years," Dai said.

Current family planning policy allows a second child if both parents are single children.

Dai also suggested raising the retirement age, which is now 60 for male and 55 for female public sector employees.

Under the current policies, 14.3 percent of the population was 60 years old in 2012, and the ratio is expected to reach 50 percent by the middle of this century. Meanwhile, the fertility rate fell to a low of 1.181 by 2010, according to the sixth national census.

Whether the aging population is a pressing problem for China's economy is a subject of continuing debate. The National Bureau of Statistics announced in January that the ranks of the labor force aged 15 to 59 had declined by 3.45 million last year to 937 million.

Dai added that the aging population is a natural result of the economic development, and the problem will not affect China's economic growth.

Qin Shuo, editor-in-chief of China Business News, said that although a small aging population is tolerable and can be addressed by lifting the retirement age, a serious aging population would hurt the economy.

"Policymakers should realize that China's moderate population growth is mainly the result of economic growth and improved livelihoods, not strict family planning policies," Qin said.

The sixth national census showed the population was lower than previously estimated, and no academic research suggests China's population will surpass 1.4 billion.

Whether there is a huge gap between China's social security fund and the demands of a rapidly aging population is also a source of concern. Dai said China should utilize more national assets toward expanding national social security reserves.

"The total social security fund is 3.7 trillion yuan ($596 billion), which is less than 5 percent of China's GDP. So it is impossible to rely solely on the fund," he said.

The pension system should be based on the National Council for Social Security Fund and contributions from corporations and households, Dai said.

The assets under the council have realized an annual return rate of 8.4 percent in the past 12 years, higher than the inflation rate during the period, Dai said.

The national pension fund reported a 7 percent investment return in 2012, its best performance in three years.

 
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