CHINA - China's impressive economic growth could be constrained if the country does not address its US$1.5trn pension debt, a report by the Employee Benefit Research Institute (EBRI) has claimed.
According to the report, An American Perspective on the Chinese Pension System, only 11% of rural workers and 50% of urban workers currently pay into the grossly underfunded social security system.
The nation is at present enjoying a period of rapid economic growth, but that could be impeded by massive pension debts.
Unless China implements reform, it runs a serious risk that inadequate funding of retirement benefits will constrain its high rate of economic growth, the report stated.
That could require the government to devote a much larger percentage of its gross domestic product to paying retirement benefits and could force workers to save a larger part of their income to finance retirement.
By Damian Clarkson
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