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China Daily Website

Clock ticks for China's demographic challenge

Updated: 2013-11-20 14:28
( Xinhua)

When it comes to tackling China's aging population, the country's policy makers know time is not on their side.

The sense of urgency is evident in the sweeping reform package released after a four-day Communist Party of China summit that sets the tone for the world's second largest economy over the next decade.

China will loosen its one-child policy by allowing couples to have a second child if at least one of them does not have siblings.

A fragmented pension system will be strengthened by merging pension schemes for urban and rural residents.

Retirement will be delayed in a "progressive manner," a move that will partially alleviate the state's pressure to dole out pensions.

Meanwhile, state-owned companies will double their contribution to public finances to 30 percent of their profit by 2020, as the country finds itself overstretched to meet pension claims from a graying population.

The decision to allow couples to have a second child and major reforms to support an aging population came after demographers' repeated calls for a change in the one-child policy. They argue a declining fertility rate has blunt the labor cost advantage and reduced input to the social security fund.

"The authorities relaxed the one-child policy because they know not doing so would exert overwhelming burden on the economy," said Li Jianmin, a demographer with Nankai University, in Tianjin.

The fertility rate, the number of births for each female, now stands at 1.5 in China. Demographers say expanding it to 1.8 is needed for balanced population development.

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