[American Thinker] Welcome to First-World ProblemsChina faces the biggest pension crisis on the planet with its social security systems running out of money by 2035 and many provincial and business retirement funds already broke.
Chinese Academy of Social Sciences released a study estimating that China's main state-sponsored social security fund could be exhausted by 2035, or about the same year as actuaries for the U.S. Social Security Trust Fund estimate its fund will run dry.
But the more immediate problem for China is that nearly half of China's 31 provincial regions expect to report operating shortfalls in their basic pension funds by 2022, compared to six in 2015. Despite federal subsidies, the northeastern China rust belt province of Heilongjiang was forced in to begin delaying pension payments in July 2018.
Only about 17.3 percent of Chinese were 60 years of age or older in 2017, compared to 21.8 percent in the U.S. But due to China's population of 1.4 billion versus 326 million in the U.S., China had 240 million people age 60 or older, compared to 70 million in the U.S.
"Bring on the swine flu!"
Unlike the U.S., which experienced its baby boom in the 1950s and is currently in a retirement boom, China's biggest baby boom was during the 1980s and its retirement boom is approaching. As a result, the number of Chinese 60 and older will skyrocket to 300 million in 2025; 400 million in 2033; and 490 million by 2050.
The international accounting and consulting firm KPMG issued a white paper that estimated in dollar terms that China's state social security system without "significant" reforms would see its funding gap spike from $590 billion in 2017 to $1.1 trillion in 2025.
With 80 percent of workers employed by a state agency or state-owned enterprise through 1978, Chinese workers expected the communist "iron rice bowl" would provide guaranteed lifetime pensions payments, plus free healthcare and public housing. But with the 1991 fall of the Soviet Union and collapse of international communist trading networks forcing China to open up its economy to competition, the state-owned enterprise sector had shriveled to just 15 percent of employment by 2017.
Mandated pension contribution rates for Chinese employers to state-run pensions are very high, but a 2018 survey by China's social-insurance information provider 51Shebao found that more than 70 percent of Chinese firms were behind on their social insurance contributions and only 27 percent of companies made full payments.