Chinese Farmers Hit Hardest by New Retirement Scheme, Experts Say
Udumbara
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The recent change in China’s struggling pension system will leave older Chinese farmers with fewer years to enjoy their pensions and more years to contribute.
That would put over 200 million Chinese elderly farmers in a tougher corner. Unlike urban workers, whose pension plan began in 1978, farmers weren’t eligible until 2009.
Analysts said the Chinese Communist Party (CCP) passed its pension plan failure on to the general public, especially farmers, who sacrificed the most under its rule. The latest policy change would likely bring more stress to a society already strained by the disparity between rich and poor and the current economic slowdown, analysts said.
In September, the CCP announced it was raising the minimum retirement age from 60 to 63 for all men, and from 55 to 58 for women in white-collar jobs and 50 to 55 for women in blue-collar jobs. The implementation will be done in several-month increments and will be completed by 2040.
In some provinces and districts, pension insurance funds were already running out. In 2016, at least 13 provinces and regions maintained less than one year of pension fund solvency; Heilongjiang Province’s accumulated balance already had a deficit of 23.2 billion yuan (about $3.3 billion), according to state media.
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Chinese Farmers Get Short End of the Stick
For more than half a century, Chinese farmers have been subjected to discriminatory treatment, identified by rural hukou—a lifetime household registration that left them largely excluded from social security benefits.The first pension pilot program for the rural population was initiated in 2009. It set a monthly basic pension of 55 yuan (less than $8).
Rural subsidies vary between provinces and regions and may be cut as local revenues decline.
China’s rural population—about 56.6 percent of total recipients—receives only about 5.9 percent of the total payments granted under the social security system, according to Cai Fang, director of the Institute of Population and Labor Economics, in a speech at the Tsinghua Forum in 2022.
Retired government officials consume a major portion of national pension expenditures.
Cai said in Guangzhou and Shenzhen, for example, the pensions of retired officials range from 16,700 to 33,300 yuan ($2,350 to $4,700) per month.
In addition, pension funds are dwindling as more youth opt out of contributing to their pensions due to unemployment or disappointment with their economic prospects. In July 2023, a month after the CCP stopped reporting the youth unemployment rate, Zhang Dandan, an associate professor at Peking University, estimated that the figure stands at over 40 percent.
Given the chronic inadequacy of the social security system, elderly peasants face a survival crisis in their remaining years. Suicide among China’s elderly peasants has been high, experts said.
The root causes of suicide, according to Li, are mainly due to the lack of a basic pension and access to affordable medical services in impoverished rural areas. According to him, elderly people who are incapacitated by illness and aging feel desperate and helpless, and fear becoming a burden to their children.
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An elderly woman is eating a meal in a nursing home. China's one-child policy and aging heighten the shortage of elder care. Liu Jin/AFP/Getty Images
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Cai said many young Chinese have to leave their hometown to earn money and cannot take care of their elderly.
“Old-aged farmers are basically left to fend for themselves unless they can earn a living or have savings,” Cai said.
Chinese peasants are among those who made the greatest sacrifices for the CCP, experts say. First, they helped the party gain power in China, then were severely squeezed in the country’s urbanization and industrialization process, according to Shi Shan, a China expert and contributor to The Epoch Times.
For example, the peasants of northern Shaanxi, where the CCP’s base was, took care of military logistical supplies during the 1930s and 1940s, while sending their children and grandchildren to fight in the communist army.
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Children were among those who suffered from the failed Great Leap Forward and subsequent famine. NTDTV
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From the 1950s to the 1970s, during the period of China’s planned economy, the CCP turned to a strategy of resource extraction from the agricultural sector—lowering state-controlled agricultural prices, which came at a significant cost to the farming population through reduced living standards and even famines—to secure for the regime its initial capital funds for industrialization.
Over the decades since the 1980s, farmers have lost their land amid the CCP’s push for urbanization and have been deprived of trillions of dollars of income, Shi said. This includes agricultural taxes, housing provident funds, rural education surcharges, fees for birth control, militia training, building township roads, and all kinds of taxes that local governments can demand.
Farmers bear the brunt of the striking disparity in the CCP’s welfare system, Shi said.
“They [Chinese peasants] pay the most for but enjoy the least social welfare, including pensions. There is no such thing as retirement for Chinese farmers; many of them have to work in the fields to make a living at 70 and 80.”
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