How a pension works in China: 10 main facts

Number of pensioners in the country

Here, as in most countries of the world, the issue of general aging of the population is becoming increasingly acute. How many pensioners are there currently in China? Statistics reveal about 226 million pensioners. However, not all of them receive decent content.

The number of senior citizens is projected to peak by 2050. It is planned that it will amount to 487 million people or 34.9% of the total number of citizens of the country. Therefore, various programs are being developed to improve the situation and rejuvenate the population.

Current pension programs in China

The main problem is that here the pension is not accrued to everyone who is entitled to it due to age. Because of this, there is a misconception that there are no pension accruals in the country. There are 2 pension programs in China:

for the urban population;
for rural residents.

Previously, payments in the country were intended only for employees of budgetary organizations and civil servants. Since 2014, city residents have been included in this category. The city pension in its mechanism resembles old-age payments in Russia. In terms of rubles, the average payment in cities reaches 24,600 rubles. In the village, the minimum pension is 1,260 rubles. Payments are not accrued to about 20% of current pensioners.

The exact level and specifics of payments are quite difficult to determine due to the specifics of the legislation. About 40% of citizens are rural residents. Urban workers who moved from the countryside are also considered as such. This creates additional difficulties with calculating actual payments.

Features of the Chinese pension system

At what age do people retire in China currently? Much depends on where you live and working conditions. The harmfulness of production and the position held are taken into account. It is interesting that a high position in a commercial structure is equivalent to working in the civil service.

Previously, pension insurance applied only to a narrow group of people. Before 1990, no more than 5.4% of Chinese could count on payments. As a rule, this concerned some employees of state enterprises. Until now, the main problem remains not only the payment of not all elderly Chinese, but also insufficient accruals in rural areas. This contributes to the outflow of the rural population to cities.

The retirement age in China for men is standard, regardless of industry. It is 60 years in all positions. In rural areas, provision begins at age 60 for both men and women. Payments here are much lower, since the costs are not as significant as in urban conditions.

The retirement age in China for women depends on working conditions. Certain standards are established:

55 years for women holding positions in public service;
50 years if work is carried out in hazardous industries and commercial companies.

There are no plans to raise the retirement age until at least 2024. The formation of pensions in cities is carried out on the basis of mutual contributions from both the employee and the employer, depending on the monthly salary. If employers contribute 20% monthly, employees are charged 8%. The employer contribution may vary by province.

In addition to the funded pension, city residents are provided with funds from the general fund. Funds from it are transferred based on the following data:

work experience;
life expectancy;
average salary level in the province.

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From what age

The amendments adopted in 1978 are still in effect in China. They contain information about the minimum retirement age in China. It was stated that only men who retire over 60 years of age and women over 55 years of age can receive regular payments.

The following amendments were in effect for civil servants, employees of municipal institutions and party offices:
Citizens who have worked for at least 10 full years and have reached the nominal retirement age have the right to receive payments.
For employees of enterprises with at least 10 years in conditions hazardous to health, the age has been reduced to 55 for men and 45 for women.

Everyone else, namely:

Private entrepreneurs and their employees.
Hired employees.
Other official employees.

You must work for at least 15 years , regularly contributing part of your salary to the pension fund.

The retirement age for such groups of citizens is nominal. The main problem in China today is the short-sighted “One Family, One Child” policy. Its purpose was the government's demographic control over the country's birth rate when it was increasing too quickly. It has led to the fact that today there are only two taxpayers per pensioner, from whose taxes money goes to pay for pensions.

And every year the situation is aggravated by the fact that the number of elderly people is growing faster than the number of working Chinese. Because of this, the Minister of Labor put forward a proposal to increase the retirement age of the population. According to Yin Weimin, Minister of Social Protection, the average life expectancy of the population has increased from 50 to 70 years. Due to this, there is a failure in the country's demographic policy.

Old age and stress on children

Until 2010, the growth of pension payments was quite slow. The number of people receiving pensions here did not exceed 20%. Often savings were spent for other purposes, even if deductions were made during working age.

The Chinese tend to save money for old age, since they do not have to rely on children. During 1970-2015, a demographic policy was pursued, according to which only one child should be born per family. This has affected the structure of society, where one child bears the burden of supporting elderly parents.

Now the working population cannot fully provide for pensioners. As retirement age approaches in China, many are looking to work longer. This allows you to maintain the same standard of living.

Rates vary significantly by province. Thus, in wealthy Guangdong, there are 9 workers per pensioner. And in the northeast of the country the proportion is 1:1.5. This is due to the slowing economy in these regions. For the fourth year now, the government has had to cover the gap in the Chinese pension fund.

Who receives an old-age pension?

Recent changes to the pension system in China have expanded the list of people who are provided for by the state in old age. Initially, only those citizens who worked for more than 15 years in government institutions could count on a pension.

Retirement age begins differently for men and women

Now the following can receive an old-age pension in China:

public sector employees;
workers;
employees of private companies;
peasants.

Retirement age begins differently for men and women. The retirement age is also influenced by the field in which a given citizen of the People's Republic of China works. The size of payments is influenced by the region where the pensioner lives.

Conditions for providing pension benefits

In order to receive a pension benefit, a citizen must replenish the state budget for 15 years. In this case, the minimum amount is 25% of the average salary in the region of China in which the future retiree lives.

Retirement age for men and women

After the Pension Reform in Russia, many citizens became interested in what time they retire in China. The law on the age at which a citizen can receive a pension was adopted back in the 20th century and is still in effect.

The size of your pension depends on many factors

Thus, men retire upon reaching 60 years of age, and women after 55 years of age. However, these numbers may be reduced. For example, if a citizen has worked for more than 10 years at an enterprise in dangerous conditions, then he can retire 5 years earlier. This amendment to the law applies to both men and women.

Determining the size of a pension in China

Who is paid a pension in China and how much in 2020? Monthly payments provided for old age can differ tens of times. It is difficult to directly compare pensions in Russia and China, since quite large payments are provided for urban residents, while in villages the payments are very small. In the latter case, pensioners are forced to rely on the help of their children, which is not always possible.

You can determine what the average pension in China is in 2020. For urban residents it is fixed at 2.5 thousand yuan (24.6 thousand rubles), and for rural residents - 127 yuan (1.26 thousand rubles).

Pensions are indexed every year depending on the growth of average wages in the province. When there was active economic growth, payments were increased by 9-10%. Today the indexation level is within 5-7%.

Increase in pension payments

The future pension is made up of monthly contributions. From the beginning of 2018, the State Council decided to increase the basic level of pensions for employees of government agencies and enterprises.

If we calculate the general data for all provinces, the pension in China in rubles for the country is 5,500 rubles. At the same time, Shanghai and Beijing pensioners receive 3,500 yuan, which is 31 thousand rubles. But it is important to take into account the high price level. As a result, payments can be slightly more than the cost of living.

Who receives pension payments?

On state The following categories of citizens can receive a pension:

officials;
managers;
persons working in industrial production;
private entrepreneurs;
residents of rural settlements receive pension payments in the amount of 10% of wages.

In some regions of China, the future pension is saved in the accounts of the enterprise, which subsequently pays the pension to the former employee.

Features of life of Chinese pensioners

Many people are interested in how retirees live in China. Here, much is determined by the place of residence and the capabilities of the province. Rural pensions do not even cover basic needs by the standards of Chinese villages. At the same time, the city pension provides a comfortable standard of living.

It is difficult to compare payments with our country. On the one hand, urban Chinese residents earn much more on average. But at the same time, we do not have such low pensions as in Chinese villages. Thus, Russian pensioners receive an average of 14,000 rubles. At the same time, the cost of living in China and Russia is comparable.

The insurance certificate is similar to the Russian SNILS. It also has an individual number. The document can be not only in paper, but also in electronic format.

For urban residents, the average payment is 20% of the average salary in the province or region. The rural population cannot count on an accrual of more than 10%. This is because villagers are not required to pay dues. Because of this, they do not have the labor part of their pension payments.

Good payments can be received by persons who live in an economically developed region and have a working experience of at least 15 years.

Russian pensioners and China

Let's consider why the Celestial Empire is attractive to ordinary Russians using the example of the city of Heihe. The distance between it and Blagoveshchensk is less than a kilometer, so city residents are constantly in contact with each other.

Food basket

Residents of Blagoveshchensk have become frequent guests at Heihe food markets. In Russia, prices for food and things are much higher, so Russian buyers are not uncommon in the markets. There is much more choice in China. In small Chinese restaurants you can have a decent meal and still spend a ridiculous 100 rubles. The prices of street fast food in Heihe are as follows: meat shashlik – 12 rubles, shashlik of 4 ducklings – 20 rubles, flatbreads with meat – 4–6 rubles, sausages – 4 rubles, noodle soup – 20.

It should be borne in mind that Chinese cuisine is quite specific: chefs use a large number of seasonings, which is why most dishes are very spicy. Street food here is also very cheap and popular. It is worth paying attention to dairy products: they are really more expensive in China. On the shelves you can see milk and cheeses of different price categories. This is due to the fact that the government, in an effort to provide food for a country with a billion people, often resorts to the use of artificial preservatives and ingredients in the production of dairy and meat products. You can buy good milk in China, but it is imported, which means it is several times more expensive. Cereals and vegetables, as a rule, are moderately expensive and available for any financial opportunity. The Chinese are also not original when it comes to baked goods, because they practically do not eat them. There is a real cult of alcohol in China - they drink it often and a lot, so there is a decent choice.

Affordable Housing

There are really many advantages to buying a home in China. Firstly, the affordable price: a one-room apartment can be bought for 300 thousand rubles. Many Russian pensioners were able to purchase housing there even with their modest pensions. Secondly, when purchasing a home, the PRC issues a residence permit. Once you receive it, you will no longer need a visa. It is known that obtaining citizenship in China is almost impossible: the state strictly regulates the country's population, accepting new citizens very reluctantly and only in truly special cases. Currently, a residence permit is the maximum a foreigner can receive. When receiving it, there is no need for a visa.

Heihe can hardly be called a densely populated city, so the apartments built here are spacious, and the cost is affordable even in new buildings. For comparison, in huge Shanghai, prices for apartments even for 30 square meters can compete with Moscow.

Another excellent option for purchasing an apartment is Harbin. Rent here is also inexpensive, and the premises are always spacious with a good layout. Renting an apartment here costs $100–150. Regular new buildings sell for 400–600 “green” per 1 sq. m. m, improved layout - 600–800 each. The only disadvantage of this city is the rather harsh climate, which not everyone can get along with. Harbin is considered one of the coldest cities in China. Buying a home in China is a truly excellent prospect, since life in this country is indeed somewhat cheaper than usual.

Payment for housing and communal services

Chinese utility bills are much lower than those established in Russia and the world in general. Such prices are obtained due to the fact that China has many energy sources. The country leads in the number of nuclear and thermal power plants. The country's economy owes a lot to the electric power industry.

Prices for utilities: heating - 70 rubles. for 1 sq. m, landline telephone and garbage removal - 350 rubles each. in year. Cold water – 9 rubles. for 1 ton, unlimited high-speed Internet – 2 thousand rubles. per year, electricity – 1.5 rubles. for 1 kW/hour.

Taking care of your health

Chinese medicine is famous all over the world, so many Russian pensioners come for treatment. This kind of medicine views the body as an inextricable whole, and diseases as disruptions in the functioning of energy channels. Treatment is carried out primarily to clean the canals. For this, acupuncture, rubbing with oils and ointments, meditation, steaming and much more are used. The effectiveness of Chinese medicine is recognized throughout the world, so Western doctors are now trying to learn from the experience of their Eastern colleagues. After a course of Chinese medicine, the patient’s condition noticeably improves, and sometimes the disease completely recedes. It is curious that universities even have separate departments that teach the art of traditional Chinese medicine. Many recipes and procedures are taken from ancient books found by archaeologists. People come from all over the world to try this power for themselves.

Travels to the Heavenly Empire

The Celestial Empire is truly famous for its beautiful nature. Settlement in the country is uneven, because a decent part of the state is occupied by mountains. Many retirees, whether Chinese themselves or foreign visitors, tour the country. For example, traveling through plantations and wildlife will be inexpensive, since prices in the provinces are much lower than prices in the country. In big cities you can see huge skyscrapers side by side with traditional Chinese houses.

China is a truly large country, which means it covers many climatic zones. In addition to cold Harbin, there are hot islands where Chinese retirees often go with their families: flights within the country are inexpensive and practically free for them. Gastronomic tours around the country, as well as those with religious themes, are popular among residents of the Celestial Empire.

To summarize, it is worth noting that China is not standing still, but is actively working on its pension system. Much has already been done: basic pension contributions have been introduced, amounts are increasing annually, pensions are becoming more accessible to all segments of the population, regardless of their place of registration. There is still a lot to be done: to begin to wage a tougher fight against those who evade taxes and to equalize the pensions of urban and rural residents as much as possible. The PRC is interested in its international development, because the economic growth of the country, and therefore payments, depends on this. China has excellent living conditions for older people: free and high-quality medicine, the opportunity to travel affordably, eat well and rent housing. Many Russian older people move to the Middle Kingdom to appreciate this level. Answering the question about whether there is a pension in China, we can safely answer that there really is one. And then it will be even better.

How do you receive a pension in China?

The Ministry of Human Resources and Social Security of the People's Republic of China is responsible for the functioning of pension programs here. To process payments, two documents are submitted - a passport and an insurance certificate. Interestingly, China has not used paper passports for a long time. A card is provided with a special electronic chip on which basic data is stored.

After reviewing the application, determining the length of service and place of work, pension payments are calculated. From this moment on, accruals are assigned. In most provinces, the amount accumulated by the employer and employee is divided into 120 months. This rule was introduced when the average period of life after retirement was 10 years. Currently, the average life expectancy is 76 years, but this system continues to be used.

Retirement age in China

In 1978, during the fifth convocation of the Standing Committee of the National People's Congress (NPC Standing Committee), the retirement age was established for the country's working population.

From that moment to the present, in China, men retire at 60 years old, women at 55 years old.

The following regulations apply to employees of state enterprises, budgetary institutions and party bodies:

Employees with a cumulative work experience in the above organizations of more than 10 years can retire after reaching the age of 60/55 years;
For men and women working in enterprises hazardous to health or engaged in heavy manual labor, retirement is available as early as 55/45 years of age, subject to 10 years of work experience, as well as upon provision of a certificate of loss of health or incapacity.

As for non-government sector workers, such as selected industrial, agricultural and commercial enterprises in towns and villages, employees working under contract or using various other flexible employment options retire at age 60/55, as do government employees if their work is not considered harmful to health, in the latter case they can retire earlier. Employees will receive basic pension benefits provided that they have made monthly savings contributions to their pension account for 15 years.

However, for many years there has been active discussion about raising the retirement age for men and women to 65 years, in connection with the crisis of the pension system in China, which arose as a result of the long-term demographic policy “One family - one child”: at the moment the number of residents of pension age in China is many times greater than the country's working population.

The report “On the Current Situation of Human Resources in the PRC” published on September 10, 2010 stated that by 2035 in China there will be one pensioner for every two Chinese taxpayers.

Yin Weimin, Minister of Labor and Social Security, said China's current retirement policy was created immediately after the founding of the People's Republic of China in the early 1950s, when life expectancy was less than 50 years. Now that more than 60 years have passed since the founding of the People's Republic, the demographic situation in the country has undergone enormous changes. The life expectancy of the population has reached 70 years. However, the state pension system has not changed. More than 80 million retirees have joined the company's personnel pension insurance system, and the average retirement age is less than 55 years.

Retirement age is decreasing

Today, the country has a classic retirement system for socialist countries. But the government has announced a reduction in the retirement age in China since 2014, which should be gradual.

According to scientists, a long period of work after 55 years for men and 50 years for women leads to various diseases. Among the most common causes are clinical depression and fatigue. The government intends to reduce the retirement age by 5 years.

At the same time, the authorities assure that this event will not have a negative impact on the economy. In the age of widespread technology development, large amounts of hard human labor are not required. The state strives to take care of its citizens, gradually improving working conditions and quality of life.

It is also planned to encourage those who plan to continue working after retirement. By 2025, a complete analogue of the North Korean system is planned, where every working pensioner receives a significant increase depending on age.

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The crisis of the pension system in China

The main reason for the country's pension crisis is the rapid aging of the nation, which was already mentioned above. The number of Chinese people who have already retired is much larger than the entire population of Russia. China's pension fund is formed as follows: from the salary of each young resident of the country, contributions are made to the Pension Fund and distributed among several pensioners.

Another serious danger for the pension system is the forecasts of Chinese analysts. They believe that in a couple of decades there will be no more than 2 residents capable of active work per retiree. But the Chinese Communist Party does not include raising the retirement age until 2045 in its plans.

The third reason relates to the personal preferences of many residents. For example, many workers do not trust China's pension fund, so they keep all their savings at home. Many are not even afraid that this is prohibited by law. If such cases are detected, a fine is imposed on the employee.

Not only employees, but also enterprises hide their real income. Therefore, the pension fund loses many billions of yuan every year.

The authorities are already developing bills to solve the pension crisis. The list of solutions includes the following items:

creating conditions in the country that will significantly increase the working life of the population;
complete abolition of bonuses and benefits for civil servants;
creation of a unified pension system - removing the distinction between rural and urban;
improving verification of violations related to contributions to the pension fund.

What are the prospects for China's pension system?

Since 1997, payments have been consistently increasing in the country. The main goal is to fully provide pension benefits to existing pensioners by 2020.

Despite the existing difficulties, the authorities are trying to solve the following problems in the next few years:

Eliminate hukou. This is a system in which the size of the pension depends on the place of residence. This will remove the imbalance and outflow to large cities with high economic indicators.
Equalize and reduce the difference between regional pension budgets.
Connect village and city funds. This should promote equal social protection.
Make more transfers to employees’ personal accounts.
Improve working conditions so that employees have an increased incentive to continue working long-term.

Due to the fact that the monthly pension in China is steadily increasing, domestic consumption is increasing. It provides more than half of the country's economic growth. As a result, increasing the well-being of pensioners is becoming one of the government’s priorities.

Thus, China has a rather complex pension system and there are currently unresolved problems. But gradually the situation is improving, and pension provision is increasing.