World Bank warns of rapid aging risks
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.