Pension Funds in China - a new look

China, home to nearly half of the population aged 60 and over in Asia, will not be spared the challenges engendered by this greying phenomenon. China's elderly population, which currently stands at 150 million, is expected to reach almost 400 million by 2040. In the wake of a series of historical transitions: from a centralised economy to a market economy; from an agricultural to an industrial society; and from the predominance of rural traditions to urban models, much of China's burden was created by the system inherited from the pre-transition era.

This new edition of Pension Funds in China provides a comprehensive and critical look at China's pension reform journey from 1949 to 2004. It documents the evolution of the country's old age income security system to its present day structure, assesses past reform processes, as well as those that are still in progress, underscores inherent risks and analyses reform options from both sides of the pension equation. This publication also provides a valuable context for projecting future development, for despite a wide range of reforms to China's old age insurance programme since the 1990s, an unfinished agenda with daunting implementation challenges still remains.

Taken from the foreword by, Robert Holzmann, Senior Director, Social Protection, The World Bank.

"When we wrote the previous edition, guidelines for the unified pension system had just been published but not implemented. There was very little information on the topic besides official documents and a handful of academic papers. In fact, some people may have wondered why we took such an interest in such a remote topic as Chinese pension funds, a market economy concept, when China's economy was still rapt in the transition from planned to market and the fund management industry was still in its founding stage. In researching for that edition, the challenge was to find relevant information to give a clear picture of the state of China's pension system at that time.

Since then, there have been many changes in the pension system and in the financial markets. There are now a great number of parties with an interest in China's pension developments from either an academic, social policy or commercial perspective. And so, there is now an abundance of primary and secondary sources of information on the topic from these various perspectives. In undertaking research for this current edition, the challenge was, therefore, to sort through all the facts and opinions, distinguish between these, and synthesise the information in a way that is relevant to our readers.

The purpose of this book is to inform and educate an international audience regarding the state of the pension reforms in China and their significance. The intended audience includes: academics, actuaries, bankers, consultants, custodians, demographers, economists, fund managers, insurance executives, journalists, pensions experts, social scientists and trustee companies.

We have tried to prepare this book on what we call the 'A, C, B' principle: accurate, complete, and 'be easy-to-read'. We hope you will find that we have kept to this principle."

Stuart Leckie and Yasue Pai

Sponsored by;
Fortis, Schroders, Standard Life Investments and Sun Life Financial.