China needs a sound pension system to prepare for the dramatic increase in its elderly population over the next few decades. The share of working-age people in the total population will peak as early as 2010 and the share of elderly will double before 2030.

By 2050, the OECD estimates, China will have more people above the age of 80 than the rest of the world combined. These people are now economically productive, but if the country does not establish a viable pension system, they will become a crippling burden by mid-century on the much smaller generation then working.