The Chinese population is ageing by the day, which is channelling more and more private capital into pension-related sectors. For the first time, the State Council has released a new document outlining new measures to spur the country’s pension industry. They cover six areas including financing, land, tax, human resources, government subsidies and operating organizations.
The State Council aims at making the pension industry more profitable for private companies, as more than 70 percent of the 40,000 pensioners’ homes in China are State-owned. The first step is to encourage private investors to bring capital and competition to the market.
"There were problems with state-owned, non-profit pension organizations, like efficiency and the lack of a variety of services they could provide. These are the things the document aim to change."said Hao Fuqing, Vice inspector of NDRC.
The State Council’s document says it expects pension related services to create 10 million new jobs by 2020.
"With the society’s ageing process, we need to focus on the products and services elderly people need. We need to turn the pension services into a cluster of industries."said Wang Suying, Vice Bureau Chief of Ministry of Civil Affairs.
In addition to supporting private financing and entrepreneurship, the State Council also plans to prioritize pension services’ use of land and lower taxes and fees. Experts say the government and businesses need to play their own roles.
"I think the government needs to put more effort in implementing their policies. And what about businesses? They need to make full use of these policies, in land use, capital and talent. These need to be done by the market."Lu Jiehua, Professor of Sociology of Peking University.
Meanwhile, Chinese people are getting older very fast. Statistics show people above the age of 60 in China reached nearly 200 million last year, and this population will grow to over 300 million by 2025.