Monday, February 20, 2006

China: Aging Population and Pension Crisis

Deutsche Bank Research has released a report indicating that China's pension system is facing a demographic time bomb--the consequence of the one-child policy--that could seriously damage its future economic prospects. According to the report ("China’s pension system
Caught between mounting legacies and unfavourable
demographics
"), "China is greying fast but at a very low income level. Low effective retirement ages will see the working age population already reaching its peak between now and 2010 and will lift the old-age dependency ratio much higher than conventionally thought." Accordingly, China is getting the demographic profile of an advanced industrial country with a mature welfare system, but with an economy still clambering out of developing status.

Source: "Deutsche Bank: China pensions face crisis" United Press International (February 17, 2006)

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