Government moves to solve pensions shortfall

Measures have been outlined to centralize payments and relieve pressure on funds. Li Lei reports.

Editor's note: This is the fifth in a series looking back at some of the most important, timely or unusual stories covered by China Daily's reporters last year.

A central question for policymakers last year was how to cope with the growing pressure of paying "old age insurance", or pensions, in the country's less-developed regions as the nation ages.

Provincial and municipal authorities manage such funds separately, which has led to a lack of money in areas with rapidly aging populations.

The problem is most acute in the less-developed provinces in China's western regions and the northeast, which have struggled for years to cope with a constant exodus of young workers.

A 2017 report shed light on the pressure facing Heilongjiang, the northernmost province.

The report, released by the Ministry of Human Resources and Social Security, found that while the country's collective fund totaled 3.7 trillion yuan in 2016, Heilongjiang had a deficit of 32 billion yuan.

The situation was no better in central and western provinces. A report published by the Chinese Academy of Social Sciences in February last year found that several provinces, including Jiangxi, Hubei, Gansu, Qinghai and the Ningxia Hui autonomous region, faced serious funding issues and that deficits are expected in the next few years.

It predicted that nearly half of provincial regions will face deficits by 2022.

"The balance problem is caused by the aging population, exacerbated by the loss of young people to the coastal regions," said Jiang Xiangqun, a professor of social security at Renmin University of China.

He added that the ripple effects of vast numbers of factory workers being laid off in the northeast have complicated the issue in the region.