With the number of retirees in China set to increase rapidly due to demographic crisis, the country's pension fund would not be enough to pay them by 2023, according to a state-run think tank.
The number of retirees in the country would soar to its peak at 198 million in 2036, based on data from the 2010 demographic census, state-run Southern Metropolis Daily said, citing a report compiled by China Academy of Social Sciences (CASS).
Pension funds would not be enough to pay employees after their retirement from 2023 given the predicted increase in numbers, according to the report titled 'Study of China's National Balance Sheet 2013'.
Besides, the ratio of pension expenses against GDP is estimated to rise to 11.85 per cent in 2050 from 2.73 per cent in 2011, it said.
The think tank also proposed that the Chinese government must take action to fix the liability by 2050 or the gap between pension spending and pension income would reach 802 trillion yuan accounting for 91 per cent of GDP, media reports said.
Huge amounts of fiscal subsidies must be granted as pension payments from 2030 to keep the system running, it said.
The research group had predicted that by 2050, the proportion of fiscal subsidies as pension funds against GDP is expected to reach 8.46 per cent, while the proportion against total fiscal expenditure would explode to 34.85 per cent.
Delaying the retirement age could be a good solution to slow down the pension system moving towards insolvency, the study said.
Another feasible plan would be to sell state-owned property, or rely on dividends harvested from state-owned assets, it said.
