گزینه ها و تاثیر اصلاحات در حقوق بازنشستگی چین: تجزیه و تحلیل تعادل عمومی قابل محاسبه

A serious obstacle to China's economic reform is the lack of a sustainable pension system. Using a newly designed computable general equilibrium (CGE) model that differentiates 7 productive activities and 22 age and gender groups, this study compares various options for financing the implicit pension debt and estimates the effects of pension reform on the sustainability of the system and on economic growth. Simulation results show that the current pay-as-you-go system is not financially sustainable and the implicit pension debt is estimated at around 46 to 64 percent of GDP in 2000. The paper proposes to use value-added tax revenue to finance the transition cost, which would make the new multi-pillar system financially sustainable. Journal of Comparative Economics32 (1) (2004) 105–127.

China's population has been aging rapidly, and the burdens of supporting the elderly are distributed unevenly across regions and sectors. A serious obstacle to China's economic reform is the lack of an effective and sustainable national pension system. Two major problems with China's current pension system, namely, the short-run problem of the pension burdens of state-owned enterprises and the longer-term problem arising from the rapid aging of the population, have deepened over the past few years. Many state enterprises have not been able to afford to pay payroll taxes and thus pension funds in many municipalities are in deficit. These deficits could threaten the fiscal stability of the central government as well as that of the local governments.1 Reforming the current pension system is now a matter of urgency. Building on previous studies, this paper addresses the most urgent issue in China's pension reform, namely, how to finance the unfunded pension liabilities. Put another way, this study investigates ways to recapitalize the pension system, which is financially nonviable.2 Using a newly designed computable general equilibrium (CGE) model that differentiates 7 productive activities and 22 age and gender groups, this study compares various options for financing the implicit pension debt and estimates the effects of China's pension reform on the sustainability of the system and on economic growth. The issues addressed have significant implications for China's fiscal stabilization and for the alleviation of poverty and inequality. First, unfunded pension liabilities represent a significant part of the direct and implicit liabilities of the central and the local governments.3 If not monitored and checked carefully, these liabilities could threaten the central government's fiscal sustainability. Second, pension reform is closely linked to restructuring of the state sector and financial sectors. Some synergy between the transition problems of the pension system and the state sector should be found. Third, all reform options involving taxation and other forms of financing have benefits and costs. This study seeks to inform the decision-making process by comparing various reform options. This paper is organized as follows. Section 2 describes the pension reform process and current problems; Section 3 examines issues related to transition cost. Section 4 describes the structure of the CGE model; Section 5 presents the baseline calibration and simulation design. Section 6 discusses the simulation results and Section 7 concludes.

This paper examines the sustainability of various options for pension system reform in China and their impacts on economic growth. By combining a CGE model and a population growth model into a recursive dynamic framework, we produce a flexible tool for simulating various pension reform plans in a general equilibrium setting. Three sets of simulations, namely, limited changes within the current PAYG system, transition scenarios linked to programs that the government is implementing or considering, and a new multi-pillar option proposal that finances the transition cost by VAT revenues, are generated. Our results show that the current PAYG system is not financially sustainable; in the baseline scenario, the system is in deficit beginning in 2000. The implicit pension debt is estimated at between 46 and 63% of GDP in 2000 yuan, depending on the assumptions on coverage and discount rates. Expanding coverage under the current system would improve the financial situation in the short run, but weaken it in the long run. The present value of the cumulated transition cost is estimated at between 60 and 80% of GDP. If VAT revenue is used to finance this cost, both pillars 1 and 2 are financially sustainable and generate a significant accumulation of reserves. This proposed reform would have a positive impact on the level of GDP relative to the baseline, although its impact is small in terms of growth rate. Several important limitations of our methodology should be mentioned. First, we assume that agents adjust their behavior according to information received in the last period so that the existence of a future pension benefit does not affect the agents' current saving behavior. Second, the model does not specify explicitly different behavioral rules for the various types of firms in China but rather assumes that they maximize profit. Third, the model may overestimate the impact of various pension reform policies on macroeconomic variables because it does not include an explicit model of the financial market. Gross national savings, including pension reserves, are assumed equal to gross investment, which implies a perfect capital market that is far from the reality in China. Furthermore, pension funds are assumed to earn interest equal to the average return on capital. Fourth, the simulation results may under- or overestimate the real effects of tax policy slightly, because the model does not take into account the cost of tax collection. Finally, the model assumes full employment so that any increase in labor supply resulting from an increase in retirement age is assumed to be absorbed fully by labor demand, which is not realistic. Given these limitations, the paper can be considered a useful exercise to inform the policymaking process but its simulation results are indicative and should be interpreted with caution.