In almost all countries of the world, authorities are concerned that their elderly citizens can receive pension payments and count on all sorts of benefits and allowances. But it’s difficult to compare how Russians live in old age and pensioners in China, since in the latter case, even in 2020, many Chinese do not receive it at all and they have to rely on their grown children or get out in other ways.
Everyone needs to know about these points, especially if you have a desire to obtain citizenship in China.
How does the pension reform work in China today, and what is the old-age pension in China for different segments of the population?
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How many pensioners are there in China?
The population of a country is considered old if the number of elderly people in it is 7%. In China, the number of people over the age of 60 is 250 million or 17%. The country has entered an active phase of aging.
The number of such people will only increase every year, but the working population will not. This is due to the consequences of the adopted law controlling the number of children in a family - no more than one child.
Now the government is trying to change the current situation and is adopting various programs aimed at increasing the birth rate and rejuvenating the population. The aging of the nation in the country puts significant pressure on the economy, because Contributions to the pension fund of each worker are divided among several pensioners.
Number of pensioners in the country
China is a prime example of a country with a demographic problem that only worsened after the adoption of the one-child law. The problem of a large number of citizens of retirement age is becoming more acute for the state apparatus. The country has a large percentage of citizens of retirement age who need financial assistance, but cannot count on it. This is due to the fact that the number of working people is decreasing, and accordingly, tax contributions to China's pension fund are decreasing.
According to the UN, in China the number of pensioners exceeds 10% of the country's total population. You also need to take into account that about 30% of children in the country are under 14 years old. It follows from this that there are very few working citizens in the country and this will not change in the coming years.
They cannot solve the demographic problem and establish a pension system because of the 180 million citizens of retirement age who need government payments. Most of the budget goes only to pay minimum pensions to categories of citizens who can count on it.
Currently, China is experiencing a rapid process of population aging, which the authorities cannot regulate with actions that affect the birth rate.
China's pension programs and system features
According to the traditions existing in the country, caring for elderly parents is the responsibility of children and grandchildren. When there is only one child in a family, this can be quite difficult to achieve. Realizing this, many sought to circumvent the law and have two or more children. This violation was most often observed in rural areas.
The pension system appeared after the formation of the People's Republic of China in 1949, but it was intended only for civil servants and employees of enterprises who had worked there for 15 years. Only 6% of the population could use it. Changes in political course, an increase in the number of elderly people, the collapse of communes - all these factors have led to the need to revise the current pension system. The reform was carried out in 1997. Since then, more people have been entitled to benefits.
In 2020, slightly more than half of the older generation received pensions. This is due to the current system in the country that divides all people into urban and rural residents. It was introduced to curb internal migration and distribute the population evenly. It does not allow farmers to move to the city, register officially and work there. Only those organizations that pay salaries in envelopes are suitable for this.
Such employment does not add length of service and does not increase the size of a future pension.
The current situation with a constant increase in the number of elderly people and an increase in life expectancy requires further reform of the pension system. Officials offer various options, but the ruling party does not want to use drastic changes and focus on Western experience. The main priority should be to improve the well-being of pensioners. An increase in payment amounts leads to an increase in their consumption and ensures economic growth.
Perspective
So far, processes are underway to reform the pension system, but at the moment there are no obvious positive results, since the number of pensioners is only increasing. And the money spent on maintaining even pensioners who receive a pension has already exceeded several trillion dollars, already amounting to almost 40% of China’s GDP, and this is a catastrophic figure. That is why China is increasingly being included in the list of countries where there is no pension.
If legislative innovations in the coming years do not justify themselves, China will find itself in a deplorable situation and will not only be able to be one of the leading countries in the world, but will not even be able to remain in the middle position in terms of living standards.
What are they like, Chinese pensioners? Interesting video.
Retirement age in China
China uses a classic pension system. It can be used by men over 60 years of age and women over 55. The age is reduced by five years for any person who has worked in hazardous conditions for 10 years. In recent years, a pension has been paid to one in four elderly Chinese.
There is widespread information on the Internet that China plans to lower the retirement age. An appeal to official resources shows that everything is exactly the opposite. In the country, the retirement period is gradually increasing and for the majority of the population by 2048 it will be 65 years (there will be no differences by gender).
What is the payment amount?
There are 2 pension systems in China:
- for city residents;
- for residents of villages and villages.
It is difficult to give an exact figure for payments, since it is fixed by taking into account many factors. But we can give an approximate average pension in China. The city pension is very similar to old age payments in the Russian Federation.
If translated into Russian currency, it can reach up to 24.5 thousand rubles (2500 yuan). In villages and rural areas, minimum pension payments are provided in the amount of 1,260 rubles (127 yuan). In such cases, pensioners can only count on the help of their children , which sometimes turns out to be impossible. According to statistics for 2020, only 70-80% of all pensioners in China receive a pension.
It is impossible to say the exact level and size of payments, since China has its own peculiarities in legislation. For example, rural residents make up 40% of pensioners. In addition, they are joined by people who worked in the city but moved from the village. This further complicates the calculation of pension payments for each category of the population.
Every year, pension payments in China are subject to indexation. And they are calculated based on the average wage in the provinces. During periods when the country experienced strong economic growth, payments were increased by 10%. This year the indexation level is 6-7%.
Important! For the general picture, we can give an example of the minimum and maximum value of payments to pensioners. For example, in Beijing the pension amount can reach up to 3.5 thousand yuan (33,609 rubles). The minimum pension in villages and villages can be as low as 88 yuan (845 rubles).
Who can receive pension payments
Employees who have reached a specified age and have the required length of service retire:
- civil servants, employees of municipal institutions - at least 10 years;
- other segments of the population –— 15.
During working life, contributions to the pension fund were required. Failure to comply with these conditions means non-receipt of assistance from the state.
The amount of payments differs in different places of residence and is:
- 20% of the minimum salary received in a particular city;
- 10% in the village.
Country pension system
For a long time, the pension system in China was based on traditional values, that is, children had to provide for the needs of their elderly parents. Over time, the level of education increased and a problem arose with providing for all pensioners. This is what became the reason for the reorganization of the pension system in the country, and it is also important that the number of pensioners is growing rapidly.
Pension reform in China
Until the middle of the 20th century, all expenses for maintaining elderly parents were borne by children. Life in China has changed since citizens have become more educated, so there is a need to carry out pension reforms and make a number of changes. According to the reform, only certain categories of citizens who had more than 15 years of experience in government agencies received a basic pension, and other segments of the population could not count on cash payments from the state.
In the 21st century, this system was revised and changes were made that provide for the accrual of pensions to the following categories of citizens:
- public sector workers;
- workers;
- peasants;
- employees of private institutions.
Each of these categories of citizens in China can expect different amounts of payments, depending on many factors.
China Pension Fund
A pension fund is a fund that is intended for pension payments for old age or disability. Payments to the pension fund are made by both the employer and the employee throughout their professional career. The country has a distribution-savings pension insurance system.
In 2020, 20% of earnings were contributed to China's pension fund, that is, 8% was paid by the taxpayer, and 12% by the organization. Also this year, pension payments were increased by 5.5% in all Chinese provinces.
Is there an old age pension in China?
Regions may change the retirement age. This is influenced by the number of people living in a particular area and the amount of subsidies received from Beijing. The amount of an old-age pension for any person depends on:
- his place of residence;
- the amount of salary received;
- transfers to the Pension Fund;
- the profession in which he worked.
The pension consists of two parts:
- Basic or basic: with 15 years of experience, the amount is calculated based on the average salary, applying indexation to it. They pay for the rest of your life.
- Cumulative: the entire transferred amount in the Pension Fund is divided by 120. It is paid back within 10 years.
Interesting from BBQcash: if a person does not have the required experience, and the established age has reached, then he can:
- delay retirement;
- pay the required fees;
- receive the entire transferred amount from the pension fund in a lump sum with interest.
This does not apply to peasants, whose payments are subsidized by the state. Their pension amounts are extremely low.
Pension amount
The modern system is based on the employee's monthly contribution to the fund. The size of this contribution can reach 20% of salary. Of this, 8% is paid by the employee himself, and the remaining 12% is required to be paid by the employer. Increased investment amounts should make it possible to close the gap in the budget caused by the demographic problem.
In 2020, the Chinese government decided to increase the minimum payments for civil servants and employees of independent enterprises. Payments will be increased by 5.5% compared to 2020. The change will affect the entire territory of the country, cities and villages.
The size of the pension in China is influenced by the locality in which the person works. So, a resident of a small village is paid 618 yuan (6180 in rubles). The same pensioner living in a large metropolis, Shanghai, will receive 7 times more, namely 3500+ yuan. Why such injustice? But if you take into account the difference in prices for utilities and food, everything falls into place.
Residents of medium-sized cities with a population of less than 10 million are paid 2,000 yuan (20,000 in rubles) per month.
Amounts of pension contributions
Official employment of a person involves the transfer of contributions to the Pension Fund for the funded part:
- employer - 20% of the total accrued salary;
- employee – 8% of the amount he receives.
This is especially important for the private sector. In government organizations, transfers are made automatically, so their employees do not need to do any reporting. In some areas of China, enterprises form the savings of their employees themselves, from which they are later paid a pension. The amount of payments depends on the amount collected by the employee during his work.
There is no fixed amount for transfers for the main part of the pension. Its size depends on the official average salary in a particular area and is equal to 25% of it. Such contributions are made for 15 years, otherwise the employee will not be able to receive social insurance.
Average pension in China
The average pension in China in 2020 was:
- ¥2,500 (₽22,573 or $353.45) - in the city;
- ¥127 (₽1146 or $17.96) - in rural areas.
The amount received in the village is very low and is not enough to provide even the most basic necessities. In the city, deductions are higher, but prices are also higher, so a pension here also does not allow the Chinese to lead a comfortable life. The average payment depends on the average salary, so it differs in different cities:
- 4100 yuan (37 thousand rubles) - in Tibet;
- 3500 (31.6) - in Shanghai and Beijing;
- 1820 (16.4) - to Chongqing.
Minimum pension in China
In 2020, residents of rural areas received the minimum. This amount is equal to 88 yuan or about 795 rubles. City residents are paid more - 618 or 5.6 thousand rubles. In 2020, they plan to increase pensions by at least 5.5%. Different levels of pensions received push older people to move to other regions:
- to the southern regions, where the climate is warmer, food and utilities are cheaper;
- deep into China with significantly lower taxes.
They do not change their registration so as not to lose the payments that were accrued to them.
Finding a solution to the pension crisis
Despite the difficulties, the categories of elderly citizens who can count on financial support have expanded significantly. The Chinese authorities have the following plans for implementation in the near future:
- elimination of “hukou” - this system assumes the size of an old man’s pension depending on the province in which he lives, even if he worked in a region with a higher regional salary (this will help villagers who were city workers receive a higher pension);
- minimize and equalize the difference between the pension budgets of different regions of the country, since it is now incredibly huge;
- connect city and village funds for social protection of citizens, and also increase the number of funds;
- eliminate the difference between pensions for employees of state and private enterprises;
- try to create the most convenient working conditions, so that employees are motivated to delay retirement as long as possible;
- make more payments to employees’ personal accounts.
Decentralization was also undertaken, which significantly reduced corruption in this area. Now decisions on the calculation of pensions are made by local governments in each province, and not by the national authorities.
According to the government, the process will be lengthy, but the equalization of payments for urban pensioners and residents of rural areas will lead to stabilization over time, so the size of the pension in China will be equal without strong gaps, because for a citizen it will not make much difference where exactly to live and work activity.
Despite the fact that many people in the country do not receive pensions, this is more familiar to them and their life is in some ways easier, since traditions in the country play a huge role and children always try their best to support their elderly parents.
With retirement, they feel free and, with a sense of accomplishment, devote themselves completely to their hobbies, self-improvement; by the way, they really like to dance in the evening. In general, everyone lives their time in this world with pleasure without unnecessary worries, devoting more time to grandchildren, relatives, meetings with acquaintances and friends.
In 2020, the average pension in China is 900-1300 yuan or 150-200 USD.
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What is enough for a pension in China?
The size of pensions varies between rich and poor regions, sometimes by eight times. An amount of 55 yuan is enough for 4 liters of peanut butter or 20 kg of rice. Gasoline prices are higher than in Russia. In rural areas you cannot live on the pension you receive, so most often children help there. They either send money or bring the parents to live with them. Families live together or rent separate housing for parents. There are social forms of employment for older people.
In 2014, a decree on social benefits was adopted, intended to:
- families whose income is below the subsistence level;
- elderly people in need of constant care;
- children;
- seriously ill.
This document contained information about special subsidies available to the poor for:
- medical services (includes acupuncture and massage);
- visiting diagnostic rooms;
- payment of utilities;
- other types of temporary social assistance.
Old people can eat for a small fee in public canteens, practice qigong and tai chi in parks, and visit museums for free. Travel agencies provide special benefits for retirees, which, combined with the small requests of the Chinese, allow them to travel around the world. In recent years, nursing homes have been appearing in China, where care is provided at a decent level.
The Chinese differ from the old people of Japan and Europe in their traditions, way of life, and undemandingness towards material goods. For them, approaching retirement age is an opportunity to spend more time communicating with family and friends, and taking care of them allows them not to think about the little things. Children help them live out their allotted time without worries by looking after their elderly parents. They feel freer, engage in their favorite hobbies, and improve themselves.
Retired Chinese about retirement
Does China have old age pension? If you ask the Chinese themselves this question, you will hear in response that in the country every fourth resident who has reached the age of 60 receives it. This is confirmed by Chinese statistics.
However, it seems that the Chinese themselves are not particularly interested in the question: “Is there a pension in China?” This apparently reflects the mentality of people who honor the traditions of their ancestors. For thousands of years, the Chinese lived relying only on themselves and their loved ones. Being proactive by nature, they have no problems with socialization and do not need outside help. For the Chinese, retirement is a time when the soul sings, because it is free from previous worries.
The fact is that older residents of the Middle Kingdom no longer value the financial component of a pension, but the normal attitude of loved ones and society as a whole.
Having retired, the Chinese are actively striving to make up for previously lost time to rest. Their favorite pastime is dancing in the evening. At venues in parks, near the metro and even on the road, you can see pensioners dancing not only folk dances with fans to the accompaniment of drums and tambourines. Older people also do not disdain waltz and tango.
By the way, this hobby often brings income to the most prominent retired dancers: when they perform at festivities and corporate events, they receive a certain fee for this.
Domestic and foreign tourism has become a new hobby for Chinese retirees. This contributes to the development of the tourism sector of the country's economy, and makes life in retirement even more interesting. Therefore, to the question: “Is it interesting to live in retirement,” the older generation of Chinese will definitely answer “yes.”
Russian pensioners on the border with China
Elderly people in the Russian Federation living on the border with China prefer to sell or rent out their homes and move there. Real estate prices there are several times lower than in Russia. Once a quarter they return to their homeland and receive their due pension.
They choose to live both in the cities closest to the border and in Harbin with its mild climate, where Russian settlers gravitated to during the Civil War.
Utilities, prices for food and things are much cheaper than in Russia, which allows Russians to live peacefully on the payments they receive. They are attracted to Chinese medicine with its specialization in acupuncture, physiotherapy, cupping and rubbing. It is based on the use of natural products. Medicine in China is very developed and meets people's expectations. The health of many improves and attracts others to it.
