China Social Science Review

No.2, 2022

Handling the Impact of Baby Boomer Retirement on the Pension System

(Abstract)

Du Yang and Cheng Jie

China’s population aging is accelerating, especially as the baby boomers born after 1962 reach retirement age. This will lead to a surge in demand for pensions in the coming period. The sustainability of the pension system will face a major challenge. By implementing demand-side reforms, such as delaying retirement and adjusting replacement rates, in tandem with supply-side reforms, such as launching a social security reserve fund, allocating state-owned capital gains, and expanding investment operations, we can hope that the pension system will break even. In the long run, the system’s sustainable operation depends on productivity improvement, especially labor productivity. A comprehensive reform of the pension system and the transformation of the economic system are indispensable.