Core Data Trends and Future Predictions of the Pension System#
1. Population Structure Trend Chart#
Figure 1: Aging Rate Trend (2013-2023)#
- X-axis: Year (2013-2023)
- Y-axis: Percentage of population aged 60 and above
- Data points: Increased from 14.9% to over 20%, with values for 2013 and 2023 marked.
Chart Interpretation: Figure 1 clearly shows the rapid increase in China's aging rate. The proportion of the population aged 60 and above has significantly increased over the decade, indicating a continuous expansion of the pension-receiving population and increasing pressure on pension payments.
Figure 2: Changes in the Labor Age Population (2013-2023)#
- X-axis: Year (2013-2023)
- Y-axis: Labor age population (in billions)
- Data points: Decreased from 1.006 billion to 880 million, with values for 2013 and 2023 marked.
Chart Interpretation: Figure 2 shows that, contrary to the rising aging rate, China's labor age population (ages 15-59) is continuously decreasing. This indicates a shrinking contributor base, adversely affecting the income side of the pension system.
Figure 3: Total Fertility Rate Trend (2013-2022)#
- X-axis: Year (2013-2022)
- Y-axis: Total fertility rate
- Data points: Decreased from 1.6 to 1.09, with values for 2013 and 2022 marked.
Chart Interpretation: Figure 3 indicates that China's total fertility rate continues to decline and is far below the replacement level. This will lead to a future shortage of young population replenishment, further exacerbating the trends of aging and shrinking contributor base, posing a serious challenge to the long-term sustainability of the pension system.
2. Employment, Insurance Participation, and Replacement Rate Trend Chart#
Figure 4: Actual Participation Rate of Employee Pension Insurance in China (2023)#
- Chart Type: Bar chart
- Single Bar: Actual participation rate of employee pension insurance, about 70%
- Y-axis Label: Percentage
Chart Interpretation: Figure 4 shows that although the number of urban employed has increased, the actual participation rate of employee pension insurance is only about 70%. This indicates that there is still room for improvement in participation rates, especially among migrant workers and flexible employment groups. Increasing participation rates is one of the important ways to expand the sources of pension income.
Figure 5: Actual Average Replacement Rate of Pensions in China (2000-2022)#
- X-axis: Year (2000-2022)
- Y-axis: Pension replacement rate (percentage)
- Data points: Decreased from 72% to 44%, with values for 2000 and 2022 marked.
Chart Interpretation: Figure 5 shows a significant downward trend in the actual average replacement rate of pensions in China. From 2000 to 2022, the replacement rate has nearly halved, indicating that the level of pensions for retirees relative to their pre-retirement wages is decreasing, which may affect their living standards after retirement.
3. Pension Income and Expenditure Gap and Forecast Chart#
Figure 6: Structure of Pension Income in China (2022)#
- Chart Type: Pie chart
- Two Parts:
- Premium income: 4.8 trillion (80%)
- Fiscal subsidies: 1.2 trillion (20%)
Chart Interpretation: Figure 6 clearly shows the composition of pension income in China for 2022. Premium income is the main source, but fiscal subsidies also account for a significant proportion (20%). The reliance on fiscal subsidies indicates that the pension system's self-sustaining capacity needs to be strengthened.
Figure 7: Trend of Pension Expenditure Growth in China (2013-2022)#
- X-axis: Year (2013-2022)
- Y-axis: Pension expenditure (in trillions)
- Data points: Increased from 1.8 trillion to 5.8 trillion, with values for 2013 and 2022 marked.
Chart Interpretation: Figure 7 shows that pension expenditure in China has shown a rapid growth trend over the past decade, with an average annual growth rate of 12%. The growth rate of expenditure far exceeds that of income, further exacerbating the widening gap between pension income and expenditure.
Figure 8: Forecast of Future Pension Surplus in China (2024-2040) (Schematic)#
- Chart Type: Line chart (conceptual/schematic)
- X-axis: Year (2024-2040)
- Y-axis: Pension surplus (in trillions)
- Trend: Starts from a positive value and trends downward, potentially crossing the zero line before 2040, indicating potential depletion.
Chart Interpretation: Figure 8 is a schematic diagram predicting the pension surplus in China based on a dynamic model. According to the analysis, due to factors such as accelerated population aging, shrinking contributor base, and slowing economic growth, the pension surplus may show a gradual shrinkage or even depletion trend. It is important to emphasize that this is a schematic trend chart, and more accurate predictions require the construction of more refined mathematical models for quantitative assessment. However, the overall trend points to serious challenges facing the pension system in the future.
I. Core Assumptions of the Model#
| Category | Indicator | Value or Description |
|---|---|---|
| Population Structure | Contributor group (ages 15-59) | 2023: 880 million, average annual decrease of 9 million (5 million before 2030) |
| Percentage of population aged 60 and above | 2035: 30% (420 million), may exceed 35% by 2050 | |
| Economic Parameters | GDP growth rate | 2024-2030: 4.5%, 2031-2040: 4.0% |
| Wage growth rate | In line with GDP (average 4%-4.5% annually) | |
| Policy Interventions | Fiscal subsidies | Average annual growth of 5% (2022 base of 1.2 trillion) |
| Delayed retirement | Fully implemented by 2030, extending contribution years by 3-5 years |
II. Key Calculation Results (2024-2040)#
| Indicator | 2024-2030 (Annual Average) | 2031-2040 (Annual Average) |
|---|---|---|
| Growth rate of premium income | 3.5%-4.0% | 2.8%-3.3% |
| Growth rate of pension expenditure | 7.0%-7.5% | 6.0%-6.5% |
| Proportion of fiscal subsidies | 25%-30% | 35%-40% |
| Cumulative gap (2040) | — | About 18 trillion (present value) |
III. Phased Dynamic Analysis#
1. 2024-2030: Accelerating Gap Expansion#
| Indicator | Value |
|---|---|
| Premium income | Reaches 6.5 trillion by 2030 |
| Fiscal subsidies | Increases to 1.7 trillion by 2030 |
| Pension expenditure | Exceeds 10 trillion by 2030 |
| Annual gap | Reaches 2.8 trillion by 2030 |
2. 2031-2040: Systemic Risks Emerge#
| Indicator | Value |
|---|---|
| Labor age population | Decreases to 730 million |
| Growth rate of premium income | Decreases to 3.0% |
| Average annual growth of pension expenditure | 6.3% |
| Fiscal subsidies by 2040 | Reaches 4.5 trillion |
IV. Sensitivity Analysis#
| Variable Adjustment | Impact on Cumulative Gap (2040) |
|---|---|
| GDP growth rate increases by 0.5% | Gap decreases by 15%-20% |
| Delayed retirement advanced to 2025 | Gap decreases by 25%-30% |
| Total fertility rate rebounds to 1.5 | Gap decreases by 10% (long-term effect) |
| Growth rate of fiscal subsidies decreases to 3% | Gap expands by 50%+ |
V. Policy Recommendations#
- Structural Reform: Complete national coordination and state-owned asset transfer before 2030 to fill historical deficits.
- Parametric Adjustment: Link pension indexation to CPI rather than wages to curb rapid decline in replacement rates.
- Multi-tier System: Increase corporate annuity coverage from 6% to 30%, expand tax incentives for personal pensions.
- Flexible Retirement: Implement "early reduction, late increase" pension calculation rules to incentivize delayed retirement.
VI. Risk Alerts#
- Population Shrinkage Exceeds Expectations: If the total fertility rate remains below 1.0 for a long time, the gap may exceed 20 trillion by 2040.
- Limited Fiscal Maneuvering Space: After the decline of land finance, the risk of relying on deficit monetization for social security subsidies increases.
- Intergenerational Conflicts Intensify: The post-90s to post-00s generation faces "high contributions, low benefits" cross-period inequity.
(Note: The model is based on the current policy framework and does not consider extreme external shocks such as wars or pandemics.)