World Bank warns of rapid ag­ing risks

China Daily (Canada) - - CHINA - By CHEN JIA

China has one of the most rapidly ag­ing pop­u­la­tions in the world, push­ing the gov­ern­ment to in­crease the re­tire­ment age and ex­pand pen­sion cov­er­age, says a re­port re­leased on Wed­nes­day by the­World Bank.

The gray­ing of the pop­u­la­tion could shrink the num­ber of work­ing-age adults in the coun­try by more than 10 per­cent by 2040, or a net loss of 90 mil­lion work­ers, ac­cord­ing to the re­port, ti­tled “Live Long and Pros­per: Ag­ing in East Asia and Pa­cific”.

“China, as well as other de­vel­op­ing mid­dle-in­come coun­tries in East Asia, are al­ready ag­ing quickly and face some of the most press­ing chal­lenges in man­ag­ing ag­ing,” it said.

East Asia, the bank’s re­search showed, is ag­ing faster than any other re­gion in history. Nearly 36 per­cent of the world’s pop­u­la­tion age 65 and over, or 211 mil­lion peo­ple, live in this re­gion, the largest pro­por­tion among all re­gions in the world.

The bank warned that the rapid pace and sheer scale of ag­ing could pose more pol­icy chal­lenges, eco­nomic and fis­cal pres­sure and so­cial risks.

“With­out re­forms, for ex­am­ple, pen­sion spend­ing in East Asia is pro­jected to in­crease by 8 to 10 per­cent of GDPby 2070,” the re­port said.

China should take steps to re­form the ex­ist­ing pen­sion plans, and a more ef­fi­cient op­tion is to grad­u­ally ex­tend the re­tire­ment age, said Philip Keefe, the re­port’s lead au­thor.

China’s cen­tral gov­ern­ment has taken note of the prob­lem, and a sim­i­lar sug­ges­tion was in­cluded in the draft of the 13th Five-Year Plan (2016-20), call­ing for “grad­u­ally in­creas­ing the re­tire­ment age”.

Ad­di­tion­ally, more work should be done to im­prove work­place fa­cil­i­ties to ben­e­fit older work­ers, and to change em­ploy­ers’ per­cep­tion that ag­ing peo­ple are less pro­duc­tive, said Keefe.

“The ex­ten­sion of the re­tire­ment age would also make it pos­si­ble to ex­pand cur­rently low pen­sion cov­er­age to in­clude those work­ing in the in­for­mal econ­omy,” he added.

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