China will gain another 300 million retirees: will the country be able to pay pensions for everyone?

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China got old before it got rich — and there are fears that the lack of care and money for the elderly will become a real humanitarian crisis in a few years. Huanchun Cao and his wife face a situation that many elderly Chinese people face: who will take care of them? LAN PAN/BBC Ask 72-year-old farmer Huanchun Cao about his retirement and he reacts with a raucous laugh. He takes a drag on his homemade cigarette, frowns and tilts his head — demonstrating that the question seems absurd. “No, no, we don’t have a pension,” he says, looking at his wife. Mr. Cao belongs to a generation that witnessed the birth of communist China. And, like many rural and migrant workers, he has no choice but to continue working and earning a living, as he cannot rely on the country’s social assistance network. A slowing economy, the reduction of government programs and the decades-long one-child policy have created a growing demographic crisis in Xi Jinping’s China. Pensions are deteriorating and the country is falling behind in the race against time to raise enough money to support the growing number of elderly people. Over the next decade, around 300 million people, currently aged between 50 and 60, are expected to leave the Chinese workforce. Who will take care of them? The answer depends on where you go and who you ask. Cao and his wife, married for more than 45 years, live in the northeastern province of Liaoning, China’s former industrial center. Vast areas of plantations and mined hills surround the province’s main city, Shenyang. Clouds of factory smoke fill the horizon, alongside some of the country’s best-preserved Qing dynasty world heritage sites. Nearly a quarter of the population here is 65 or older. A growing number of working-age adults are abandoning work in heavy industries in search of better jobs in larger cities. Cao’s children have also moved away, but are still close enough to visit their parents often. “I think I can only keep doing this for another four or five years,” says Cao, after he and his wife are returning from collecting wood. Inside the house, flames crackle beneath a heated platform called a kang, the main source of heating there. Cao lives in what used to be the industrial heart of China I will become a burden to my children. They will need to take care of me.” This is not the future that 55-year-old Guohui Tang wants. Her husband had an accident at a construction site and her daughter’s college education drained all her savings. So the former excavator operator saw an opportunity in elderly care to finance her own old age. She opened a small nursing home about an hour outside of Shenyang. The nursing home that Tang runs is his retirement plan Tang grows food to fill the meals of six nursing home residents. Animals are not pets — they are also food. Tang points to a group of four elderly people playing cards as the sun illuminates the small winter garden. “Look at that 85-year-old man: he has no pension, he depends entirely on his son and daughter. The son pays for one month, the daughter pays for the next month, but they also need to support themselves.” She is worried because she will also have to depend on her only daughter. For generations, China has relied on the piety of children to fill gaps in elderly care. But there are fewer sons and daughters for aging parents to count on — one reason is the one-child policy, which prevented couples from having two or more children between 1980 and 2015. Residents of the nursing home created by Tang: many have no income But the pension system could run out of money by 2035, according to the Chinese Academy of Sciences, a state agency. And that was an estimate from 2019, before the shutdowns caused by the pandemic, which hit China’s economy hard. The country may also be forced to raise retirement ages, which are one of the lowest in the world: 60 for men, 55 for women in white-collar occupations and 50 for those in more manual jobs. But economists say this would be an insufficient measure to prevent what some fear could become a humanitarian crisis within 25 years. However, depending on the elderly person’s income, the situation is not that dramatic — although it also involves making choices. The Fengs have a more comfortable situation than the average Chinese elderly person. It’s hard to keep up as she runs down the hallway to tell her husband that visitors are on their way to their room at the Sunshine Care Home nursing home. The morning fitness class where she laughed and gossiped with her friends just ended. The house was built to house more than 1,300 residents. Around 20 young people volunteer to live here for free in exchange for helping to care for some elderly people. Private companies partially finance the house, relieving pressure from the local government. It’s an experiment as politicians look for solutions for an aging China. Here in Hangzhou, in southern China, it is more possible to afford these efforts. This is a different world than Liaoning — the shiny new buildings that are springing up are home to tech companies like Alibaba and Ant, a magnet for ambitious young entrepreneurs. The Fengs have been here for eight years. The nursing home is friendly and there is lots to do, such as gymnastics, table tennis, singing and theater. There are plenty of activities to occupy the residents of Sunshine Care Home She and her husband have been married for over 50 years. It was love at first sight, they say. When their grandson graduated from high school, they decided their homework was done. “There are few people our age who think like us,” says Feng. “We seem to care more about enjoying life. Those who don’t agree think it’s unnecessary to pay a lot of money to live here while they have their own home.” But she says she has a “more open mind”. “I thought about it. I just gave my house to my son. All we need now are our retirement cards.” The couple’s room at the nursing home costs around 2,000 yuan (about R$1,400) per month. As former employees of state-owned companies, both have enough pensions to cover the costs. What they receive is much higher than the average pension in China, around 170 yuan per month (R$120) in 2020, according to the International Labor Organization. The conditions of Tang’s clients, who are poor and often without a pension, contrast sharply with those of Sunshine Care Home’s clients. The director says nursing homes are expensive to start with and take time to turn a profit. Beijing has been pushing private companies to build nursing homes and infirmaries to fill gaps left by debt-laden local governments. But will companies continue to invest if profits are far away? Other East Asian countries, such as Japan, are also seeking funds to care for large numbers of elderly people. But in this case, the country was already rich when it began to become one of the oldest populations in the world. China is aging rapidly without this support. Thus, many seniors are forced to follow their own path — at an age when they should be planning their retirement. Shuishui, 55, has found a new career in what is being called “the silver-haired economy.” “I think what we can do is try to influence the people around us to be more positive and to continue to learn. Everyone may have different levels of family income, but whatever the circumstances, it’s best to try to be positive.” Shuishui knows she is part of a privileged group in China. But she is determined to hope for the best. The former businesswoman is now a recently graduated model. On the sunny banks of the Grand Canal in Hangzhou, she and three other women, all over 55, touch up their makeup and hair. Shuishui (first from left) poses for a photo with friends XIQING WANG / BBC Each has chosen her own traditional Chinese attire in red or gold — floor-length silk skirts and short coats lined with fur to keep out the spring chill. These glamorous grandmothers are modeling for social media. They struggle to balance in high heels over the historic Gongchen cobblestone bridge, smiling at the camera as a social media team shouts instructions. This is an image of graceful aging that Shuishui wants the world to see, and she feels like she’s doing what she can to recover a struggling economy. But this image belies the reality of millions of elderly people in China. Back in Liaoning, wood smoke rises from the chimneys, signaling lunchtime. Cao is stoking the fire in his kitchen to heat water to make rice. Cao and his wife say they don’t want to leave their village to live in the city “I won’t join them in the cities. Their house doesn’t have an elevator and you have to climb five floors. That’s harder than climbing a hill.” For Cao, this is simply the way things work. He has to keep working until he can’t anymore. “Ordinary people like us live like this,” he says, pointing to the fields outside that are still covered in ice. Spring will bring back planting season — and more work for him and his wife. “If you compare this to life in the city, it is clear that farmers have a more difficult life. How can you make a living if you can’t stand the harshness?” he asks, faced with a future full of questions. Why did the price of milk collapse, but cheese and butter remain expensive? ‘End of deflation’: why Japan is no longer the last country with negative interest rates in the world

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