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No Time to Retire

Struggling on meager pensions and facing soaring costs, calls to increase the basic state pension are mounting as many rural seniors are forced to keep working

By Xie Ying Updated Jun.1

Chen Jiwu, a village doctor in Yankou town, Huainan city, Anhui Province, visits his patient, December 21, 2022 (Photo by VCG)

An elderly farmer works the land in a village in Yichang, Hubei Province, October 18, 2021 (Photo by VCG)

Duan Xiuying, a widow who lives in Huining County, Gansu Province, scratches out a living by recycling, July 22, 2017 (Photo by VCG)

Played out against sad background music, an elderly couple, almost bent double, labor to haul an old manual plow through a small plot of land, turning over the bare furrows to get ready for planting. As they pull, one at each end, the wind whips their gray hair, their faces grimacing under the strain.  

The viral video was posted by a WeChat social media account called “Yimeng Daniuniu” which shares short videos about the rural elderly in the Yimeng Mountain area of Weifang, East China’s Shandong Province. Since it was posted in late March, it has been forwarded over 10,000 times. Many viewers expressed great sympathy for the couple, saying they are an example of how so many seniors in rural areas still have to struggle and work to scratch out a living, when they should have retired years ago.  

Among more than 3,600 comments, one that said seniors like this only receive a meager monthly pension of 100 yuan (US$14) sparked a huge discussion about the pension system in rural areas. According to official data, the national average rural pension, paid by the government, is only 188 yuan (US$27) a month, less than one-tenth of rural people’s average monthly expenditure per capita in 2022, according to official data.  

“If they stop working, they might not have enough to eat,” said one comment. “The contrast is really sharp when seniors in urban areas are dancing in parks, while rural ones sweat and toil on the land,” said another.  

Pei Chunliang, Party secretary of a village in Hui County, Henan Province shares these concerns. During the 2023 two sessions, the annual government legislative meetings in Beijing, Pei, a delegate to China’s National People’s Congress, appealed to raise the basic government pension for rural seniors and close the huge gap with urban pensions.  

“Take the villages in Hui County as an example. People over 60 receive a monthly pension of 180 yuan (US$26) while urban seniors get 2,000 yuan (US$286). It’s a huge gap,” Pei said. 
 
China implemented a new rural social insurance system in 2009, under which rural pensions consist of three parts: the basic pension paid by public funds, paid voluntary individual contributions, and a local government allowance of around 30 yuan (US$4) a month, though it varies by region. The system is separate from the social insurance system for urban employees in place since 1986, under which the pension amount is determined by employees’ average wage and how much they and their employers paid into the insurance scheme. Because so few rural seniors paid contributions to the pension scheme as it started so late, most receive only the basic government pension after they reach retirement age.  

Most local governments raise the basic government pension every year or so. Weifang raised it in 2022 by 10 yuan (US$1.4) a month. However, the amount is nowhere near enough to cover even basic living costs.  

This problem is compounding as China becomes an aging society with a higher urbanization rate. More young people are moving to cities for a better job, leaving their elderly parents at home. There are some 130 million people over 60 living in rural areas.  

“My investigations tell me that support for seniors has become a common social issue in both urban and rural areas... While pensions for urban retirees can be enough to live on, rural people, especially those in developing areas, have to keep working well into their 60s and 70s since the government pension is far from enough to support them in their later years,” Pei told NewsChina. 

Meager Pensions 
Chen Xianhong, an 80-year-old farmer in Wuhu, Anhui Province, still has to work some of his land to grow food. “I can’t rent it all out to other people. I have to plant some vegetables and rice for myself. It’s much cheaper than buying,” he told NewsChina.  

Chen receives a monthly government pension of 150 yuan (US$21). “I’ve been drawing the pension since I was 60 – it was 60 yuan (US$9) back then. The [local] government generally increases the pension every year. It was around 140 yuan (US$20) last year,” he said.  

Before 2009, rural dwellers had to rely on savings in their old age. The government allowance was mainly paid to disadvantaged groups, such as those in poverty, people with no children or spouse, or the disabled. The 2009 system was the first to cover the entire rural population. The rules said that in 2009, those 60 and older are entitled to the basic government pension for free until death, while those nearing 60 should pay insurance premiums until retirement age. People who have at least 15 years or more before they reach 60 should pay at least 15 years worth of insurance premiums to qualify to draw the pension at 60.  

Every year, the central government sets a minimum amount for the rural pension – it was 98 yuan (US$14) in 2023 – and local authorities set their own figures to top it up. Retirees who paid into the scheme are eligible for higher pensions than those who did not pay voluntary contributions.  

To encourage people to pay more into the scheme, and therefore get higher pensions, the government allows rural seniors who have not paid 15 full years of insurance to make up the difference before they reach 60, but few do so.  

“Nobody told me about this,” Chen told NewsChina. “How big would the make-up be? I don’t think I could have afforded it,” he said.  

NewsChina did the math for him: Chen was already 66 by 2009, so he would have to pay the full 15 years of contributions up-front if he wanted higher monthly pension payouts. If he paid the lowest annual voluntary contribution, 100 yuan (US$14), he would have paid a total of 1,500 yuan (US$214), and his pension would have been around 11 yuan (US$2) a month higher. If he chose to pay the maximum 500 yuan (US$71) a year, he would have paid 7,500 yuan (US$1,071), increasing his monthly pension by around 55 yuan (US$8) a month.  

“That’s a huge amount for rural people. I don’t think I would have wanted to pay it,” Chen said. According to China’s National Bureau of Statistics (NBS), in 2009 the average annual disposable income in rural areas was 5,153 yuan (US$736).  

Wang Qiuquan, a 67-year-old farmer in Hengshui, Hebei Province, agrees with Chen. Although he has received his pension for seven years, Wang still works as an electrician and farms his land. His daughter, Wang Shuna, offered to pay the extra pension contributions for him, but he refused.  

“My daughter told me she’d help me make up seven years’ pension,” he told NewsChina. At 500 yuan (US$71.4) each year, she would have paid a total 3,500 yuan (US$500). “I didn’t think it was a good deal. The [monthly] increase isn’t worth that much money,” Chen said.  

“The make-up payments might not be a big deal to city folk, but they really are for us country folk, especially older ones who have been industrious all their lives like my father,” Wang Shuna said. “Actually, it’s hard for them to accept the idea of paying a lump sum and getting it back bit by bit later, even though they’ll end up getting more back if they live long enough,” she said, revealing that her father receives a monthly pension of 130 yuan (US$19).  

“As far as I know, no seniors in our village made up the contributions they lacked by the time they reached 60,” she added. 

Farmers in a village of Changde, Hunan Province deliver their rice quotas as an agricultural tax to the government in August 1997. Changde is one of China’s leading rice producers (Photo by VCG)

Bill of Reluctance 
Working as a farmer and doing odd jobs, Wang Shuna, 37, pays 300 yuan (US$43) a year in rural social insurance. “I’m considering paying more, because I’m young, and I don’t need to pay the extra before I retire. But I’m hesitant. I know that if you pay more, you get more back, but what if the policy changes in the future? Who knows?” she said.  

To cater to different income groups, many local governments have increased the amount of payment levels for social insurance, with developed regions like Beijing raising the minimum to 1,000 yuan (US$143) a year and the maximum to 9,000 yuan (US$1,286). But according to a report in the State-run Farmers’ Daily, rural workers usually prefer to pay the minimum.  

The report attributed this to the slow increase in the basic government pension and the long period to get it back. Chen Xianhong’s 51-year-old daughter, Chen Wu, runs a decoration company in Beijing but pays social insurance in her hometown. Paying 300 yuan (US$43) annually for 15 years, she is eligible for around 190 yuan (US$27) a month after the age of 60, supposing the basic government pension remains the same as now. At current levels, she would get back the 4,500 yuan (US$643) she paid in two years. But if she upped her contribution to 3,000 yuan (US$429), she would get about 500 yuan (US$71) a month after she retires, but it will take more than seven years to get back the 45,000 yuan (US$6,535) she paid in.  

“Living hand to mouth on low incomes, plus poor promotion of the scheme and lack of a regular mechanism to adjust rural pensions, many rural seniors are unwilling to pay insurance and are unaware that if they put more in, they’ll get more out,” the Farmer’s Daily report said.  

Chen Wu also said that even though she can afford to pay the maximum, she worries she will not get it all back if things change in the future.  

“In farmers’ eyes, it’s better to hold onto money than pay the government now and get it back much later... It’s a very common rural attitude,” Zheng Fengtian, a professor at the Renmin University of China’s School of Agricultural Economics and Rural Development, told NewsChina. 

A bronze cast by Wang Sanni, a farmer in Hebei Province, to commemorate the 2006 abolishment of the farm tax, is displayed at the China Agricultural Museum, Beijing, February 27, 2022. For thousands of years Chinese farmers were taxed a portion of their rice harvest (Photo by VCG)

The Calls 
Chen Wu, her husband and son all work in Beijing, but her father and mother still live in their village, where they spend around 1,000 yuan (US$143) a month on living expenses, excluding pesticide and fertilizer.  

“They just grow some vegetables and have to buy other food and necessities from the store. Although they have some income from land they’ve rented out, it’s not much,” Chen Wu said. She gives money to her parents every month.  

Wang Shuna takes care of her mother and father at home. They live a frugal life. Wang Qiuquan refuses to stop working as an electrician and will not accept money from his daughter.  

“My parents don’t want to burden me. They’re even saving money for my later years, since I’m divorced and raising my daughter on my own,” Wang Shuna said. “They don’t even want to drink milk every day,” she added.  

One 67-year-old worker in Zhangjiakou, Hebei Province told NewsChina that he does not know how much longer he can work. “I get 130 yuan (US$19) in pension every month, and I’m still working in urban areas, but I don’t know how long it’ll last, because I am getting older and weaker and it’s getting increasingly harder for me to find work,” he said.  

According to a 2021 survey by the NBS, nearly 80 million people above 50 years old from rural areas worked in cities, 27.3 percent of the total number of rural workers. In a 2022 report about older rural workers by financial portal yicai.com, writer Zhang Zheng from Peking University’s Guanghua School of Management cited a 2017 survey by China Information News, a newspaper under the NBS, as saying that the number of rural people aged 60 and older working in urban areas increased by 2.22 million in 2017 alone.  

The Farmers’ Daily also cited a survey by the Chinese Academy of Social Sciences as saying that rural seniors’ incomes mainly rely on labor, renting out their land and transferred assets (like pensions), but the money from renting their land was less than 600 yuan (US$86) per year.  

Some analysts argue there are good reasons for the gap in urban and rural pensions – rural dwellers have land and houses and therefore pay no rent, whereas the cost of living in urban centers is increasing rapidly. Urban employers also pay pension contributions for their staff, the biggest portion of the final pension, while the basic part of rural pensions are paid entirely by the government.  

But Chen Wu and Wang Shuna both said that elderly farmers like their parents already gave the government a lot of their rice crop before the 2000s, and it is unfair for them to be underpaid in their later years.  

To promote industrial development along with agriculture, in 1955 the State set a rice quota for each rural family as a form of tax. The system was not abolished until 2006.  

“At the time, the government collected our rice at a very low price, a quarter or a fifth of the market price,” Wang Shuna said.  

“I don’t remember the exact price... It was very low, but my parents always gave them their best rice,” Chen Wu said.  

Many experts argue that when the rural pension barely covers minimum daily expenses, it fails to fulfill its original purpose of supporting seniors.  

“We have to consider raising rural pensions. It’s indeed a lot of money for the government but I think there is room for us to increase the amount annually,” said Bai Yansong, a news anchor for China Central Television and a Chinese People’s Political Consultative Conference (CPPCC) member, during the 2022 two sessions.  

“We have to improve the system of regularly adjusting the basic government pension for rural areas,” Zhang Lianqi, an accounting consultant invited by the Ministry of Finance and a CPPCC member, told China News Service during the 2023 two sessions. “Chinese farmers have made enormous contributions to China’s modernization and rural revitalization, and we are able to and should be historically liable to repay them,” he said.  

According to Zhang, rural pensions differ between regions. The national average is less than 200 yuan (US$29) a month. In wealthier provinces like Zhejiang, it is between 200-300 yuan (US$29-43). In Beijing, it rose to 887 yuan (US$127) a month this year, while Shanghai’s is even higher at 1,300 yuan (US$186). But as rural expenditure does not differ greatly between regions, it is imperative to increase the basic government pension, especially in undeveloped and impoverished areas.  

“Increasing the rural government pension should be a breakthrough for rural reforms... and the increase should be dynamic and based on the annual disposable income of rural residents and the Consumer Price Index,” Zhang said.  

Older seniors, generally those over 80 do get an additional 50 yuan (US$7) allowance a month. Zheng Fengtian suggested expanding this policy. “If rural people over 60 get 300 yuan (US$43) a month, those over 70 get 500 yuan (US$71) and those over 80 get 800 yuan (US$114), I believe the Chinese farmers’ satisfaction index would soar,” he told NewsChina.  

According to Zheng’s calculations, the government needs to input around 200 billion yuan (US$29b) more every year to raise the nationwide rural monthly pension to 300 yuan (US$43). “I don’t think this number is too large,” he said.  

Chen Zongsheng, director of the China Institute of Wealth and Economics, Nankai University in Tianjin, goes even further. “If we truly want to benefit rural people, their pensions should be at least half that of urban employees, around 1,000 yuan (US$143) if the urban average is 2,000 yuan (US$286). This, combined with other income sources like land, would provide much better support for rural seniors,” he said.  

The seniors NewsChina interviewed said an ideal pension would be 800- 1,000 yuan (US$114-143), which echoes experts’ suggestions. “If our pension really increases to 800 yuan (US$114) as the experts suggested, I’d be extremely happy,” Chen Xianhong said.  

China’s 14th Five-Year Plan (2021- 2025) pledges to gradually increase rural pensions and urban unemployment benefits. Liu Chonglong, a director from China’s Ministry of Human Resources and Social Insurance, told media during the 2023 two sessions that the ministry will raise the pension by increasing the basic payment and improving the returns of individual contributions. 

Experts believe these reforms should move faster. “It’s impossible to immediately close the gap between rural and urban pensions, but it is completely possible for us to narrow the gap and properly increase the rural pension. We should take bigger and faster steps,” Chen Zongsheng said.  

“My parents often say ‘less is better than nothing,’” Wang Shuna said. “But I think the government should give back to those farmers who contributed so much to the country’s development and are now too old to support themselves,” she said.

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