China's Elderly Need an Insurance System on Scale of Great Wall, ICPD+5 Meeting Told

United Nations Population Fund
Contact: in New York:
William A. Ryan

The ICPD+5 review process

China's Elderly Need an Insurance System on Scale of Great Wall, ICPD+5 Meeting Told

BRUSSELS, 8 October 1998 -- China urgently needs to establish a universal old-age insurance system and other family support services to respond to its rapid population ageing, UNFPA's Technical Meeting on Population Ageing was told today. Such an undertaking would be on the scale of building a new Great Wall of China, according to Zeng Yi, a professor at Peking University's Institute of Population Research.

Mr. Zeng was speaking on economic policy implications of an older society, the theme of today's session. Papers were presented on population ageing, economic growth and intergenerational transfers; private versus public pension schemes; and policy issues on the employment of the elderly.

The four-day Technical Meeting on Population and Ageing, which will end on 9 October, is part of "ICPD+5", the review of the achievements of the 1994 Cairo International Conference on Population and Development (ICPD). Organized by UNFPA and the Population and Family Study Centre, a Flemish Scientific Institute in Brussels, it is reviewing the experiences of the developed countries in population to identify lessons and best practices that can be adopted by developing nations. It will appraise the implementation of the ICPD Programme of Action and identify key actions needed to meet older persons' needs.

Elaborating options in ageing and policy trade-offs in his country at today's session, Mr. Zeng said that a successful effort to set up an old age insurance scheme in China, which accommodates more than one-fifth of the world's population, would help many other countries similarly facing rapid population ageing.

The professor said population ageing in China has six main features. They include a very high speed of ageing; very large quantity of the elderly; very rapid increase of ‘oldest old' in the next century; ageing being more serious in villages; consequent changes in family household structure; and coexistence of rapid population growth and low per capita gross national product.

In China, he said, people aged 65 and above will account for a quarter of the population by 2050. It will take China only a few decades to go through a transition that European societies underwent in 100 to 200 years. The number of older persons could reach 232-331 million between 2030 and 2050. In 1990 there were about 8 million "oldest old" over age 80; their number could increase to 60-160 million in the same years.

James Schultz, an economist from Brandeis University in the United States, made a presentation on the economic implications of ageing. He said that many respected economists and institutions are making gloomy predictions based on flawed assumptions.

"There have been all sorts of demographic statistics presented in population ageing discussions. Most are worthless in assessing the economic impact of an ageing population," he declared. In the United States, he noted, the retired "baby boom" generation and their children in 2030 are likely to share a per capita income (inflation adjusted) that is three times greater that of 1964.

In discussing such factors as the quality of labour, worker interaction with technological change and savings/investment rates, the economist challenged a number of assumptions. For instance, there is much research that calls into question the presumption that older workers generally are less productive than their younger counterparts. Many older workers find ways to compensate for functional limitations or mental and physical declines that sometimes occur as people age, he said.

"We find the issues, problems and challenges of population ageing to be many," Mr. Schultz concluded. "But we also find the future prospects to be not as bleak as others picture them. There is no crisis."

Jorge Bravo of the Population Division of the Economic Commission for Latin America and the Caribbean said discussions on pension policies will become more important as populations age and the effects on public budgets are felt more sharply. Studies into the intergenerational distribution effects of public and private pension systems will become more useful in informing on the financial and other consequences of policy options in various countries.

The first public pension system dates back to the end of the 19th century in Europe, and public systems became common only after the Second World War, Mr. Bravo said. Before then, support for the elderly was normally provided by families, communities and market mechanisms. The number of public pension systems has risen from about 30 in 1940 to some 100 by 1970 and more than 150 by the mid-1990s. Populations covered by the systems vary from single-digit percentages in some African States to virtually complete coverage in developed nations. Asia and Latin America show a wide range of variation in coverage, from little more than 20 per cent in China, to nearly universal in Cuba and Brazil, he said.

After the presentation and discussion of papers, the participants listened to a panel presentation on perspectives on key policy issues regarding the elderly.

The current meeting is being held a week after this year's International Day of Older Persons, during which the United Nations declared 1999 the International Year of Older Persons. Ageing also is one of the main themes of UNFPA's flagship publication, The State of World Population 1998, entitled "The New Generations".

(For information purposes only. Not an official document.)

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