The central government will annually invest some 50 billion yuan (US$6 billion) to ensure timely pension payments to retirees in western and central regions of China.

With additional 6 billion yuan (US$750 million) injection every year from local governments, basic living expenditures can be covered for retired people in urban regions of China's hinterland, said Vice-Minister of Labor and Social Security Wang Dongjin Tuesday.

"We can basically manage the situation now but the nation is seriously challenged because it has a rapidly growing ageing population," said Wang, adding that 16 percent of China's total pension payments currently come from the government coffers and the rest is from old-age insurance.

He said the central government will maintain the injection rate for the next several years in the western regions, while coastal and eastern provinces and municipalities rarely have needed to rely on such support because of robust economic strength.

Wang revealed the plan at Tuesday's press conference organized by the State Council Information Office to provide details on China's first-ever white paper on social security.

Wang and his colleagues showed serious concerns about China's increasingly serious pension problems, while boasting that after years of experiments and practice, a social security framework with Chinese characteristics has initially taken shape.

Since China established and improved its socialist market economy system in the mid-1980s, a series of reforms have been introduced to change the old social security system practiced under the planned economy.

China's social security system includes social insurance, social welfare, a special care and placement system, social relief and housing services.

As the core of the social security system, social insurance includes old-age insurance, unemployment insurance, medical insurance, work-related injury insurance and maternity insurance.

"But regional differences still remain and we still have a long way to go before reaching our goal," said Wang.

Wang said the country's goal is to have all of its 1.3 billion population under its social security umbrella. Meanwhile, major social insurance should cover all of the 250 million and 450 million working laborers in cities and rural regions.

Hu Xiaoyi, spokesperson for Wang's ministry, said the Chinese government has improved the old-age insurance system and reformed fund-raising modes in an attempt to establish a multilevel, old-age insurance system.

China is now an ageing society. As the ageing of the population quickens, the number of elderly people is becoming very large. This trend will reach its peak in the 2030s, said Hu.

A recent report by the Chinese Academy of Social Sciences was cited that compared with developed countries, China's ageing problems will rapidly arise amid its comparatively poorer social and economic conditions, posing severe challenges to the country's lofty ambition of building an all-round, well-off society.

Statistics show that, from 2000 to 2007, the number of Chinese people aged 65 or older will increase from the current less than 100 million to more than 200 million, up over 4 million per year and the aged will make up 14 percent of the total population.

But from 2028 to 2036, the number of the same group will surge from 200 million to over 300 million, indicating that the aged Chinese will increase by some 10 million each year and make up 20 percent of the nation's total population.

Hu also said China's current framework of the support of the aged will also confront historical challenges. There is no doubt that during the ongoing transitional process, the lack of a huge amount of pensioners, or only 44.9 percent of the urban employees and 85.4 percent of the retirees covered, remains a tough issue that will require more governmental efforts.

(China Daily September 8, 2004)