Economics
China's Next Debt Bomb Is an Aging Population
- Government obligations may soon double or triple, analysts say
- Li has pledged to keep raising basic payments and pay in full
People practice tai chi at Tiantan Park in Beijing.
Photographer: Tomohiro Ohsumi/Bloomberg
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China’s pension shortfall is emerging as the next big challenge for policy makers as they intensify their years-long campaign to keep rising debt from derailing the economy.
Aging in the world’s most populous country means pension contributions by workers no longer cover retiree benefits, forcing the government to fill that gap since at least 2014. Pension expenses rose 11.6 percent to 2.58 trillion yuan ($410 billion) in 2016, leaving the government a 429.1 billion yuan tab to cover the shortfall, according to the latest available data from the Finance Ministry.