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Actively Advancing the Supply-side Structural Reform of the Pension Industry
2017-03-03
By Yu Bin, DRC
2017-1-17
Relevant data show that China’s population aged over 60 has reached 220 million in 2015. China’s pension market has a huge demand. To promote the sustained and healthy development of China’s pension industry, the government needs to actively advance the supply-side structural reform of the pension industry from the following three aspects.
First, the government needs to make an in-depth study of market performance to find out the real needs and potential needs of the aged, so as to truly meet the need of the old people. The number of aging population in China is increasing fast and China has to face up to the issues relating to the aged. It is not appropriate to review the scale of China’s pension industry only by calculating the number of the aged population. It is necessary to make a further study of the characteristics of the pension market in developing the pension industry in China.
Second, the government needs to reduce the ineffective supply and increase the effective supply to improve the adaptability of the supply structure to the demand structure. China’s new-form and mid-to-high-end pension supply that could meet the requirements of the aged is obviously insufficient. More efforts need to be made to get to know the needs of those aged with adequate income, higher life expectations, and strong affordability.
Third, the government needs to push forward the reform of administrative management system, break the monopoly, and flesh out the factor market to let the price mechanism truly guide the allocation of resources. With a large scale, a long payback period, and relatively poor profitability, pension industry investment needs more concern and assistance from the society and the government to remove relevant institutional barriers, so that the supply side can generate new vigor and vitality and adapt to the changes of the demand side. The fundamental way to achieve the supply-side structural reform of the pension industry is to deepen the reform.
