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China’s Young Generation Abandoning the Idea of Saving for Retirement

China’s Youth Are Giving Up on Saving for Retirement

China wants young people to put money away for retirement. Tao Swift, an unemployed 30-year-old, is not interested in hearing it.

“Retire with a pension?” he asked. “I don’t hold much hope that I can definitely get my hands on it.”

Mr. Tao, who lives in the southern city of Chengdu, is not alone in thinking this way. On social media forums and among friends, young people are questioning whether to save for old age. Some are opting out, citing the shortage of jobs, low pay, and their ambivalence about the future.

Their skepticism betrays the enormous challenge for China’s leaders. Over less than three decades, the country has changed from a young society to an aging one. Seven straight years of plummeting births are pushing up the day when there will be fewer people working than retirees.

The fast-changing demographic profile is putting tremendous strain on China’s existing underfunded pension system. An average retirement age of 54, among the lowest in the world, has made this stress more acute.

A grinding economic slowdown, the worst since China embraced capitalism four decades ago, is leaving many people out of work or with little room to put money aside.

China has passed a demographic Rubicon just as many other countries have before it. The problem of underfunded retirement programs is not unique to China, either. But China’s demographic and economic troubles are colliding, shaking confidence in the pension system.

China is aging so quickly that over the next quarter-century, 520 million people, or nearly 40 percent of its current population, will be older than 60. And over the next decade, the public pension will run out of money, according to the Chinese Academy of Social Sciences, a government research institution.

“Because of the aging population, people are skeptical about their future pensions,” said Tao Wang, the chief China economist at UBS. “They worry that in the future, the payout would be less.”

China’s leaders could begin to tackle the problem by raising an “alarmingly low” retirement age, Ms. Wang said. They have talked about doing so gradually but haven’t yet taken action.

Recent history has also contributed to the problem. Until the 1980s, China had a planned economy, and state-owned enterprises paid salaries to workers until their deaths. As officials took on market-oriented reforms, they also set out to create a more inclusive pension system.

In the first decades after China opened its economy to the world, the Communist Party prioritized growth, forgoing the investment needed to build a broader social safety net. And as officials reformed state-owned enterprises in the 1990s, tens of millions of people lost their jobs.

Officials began to create a new pension system that would eventually cover most of the population under three pillars. The first is a public and mandatory program that has the largest enrollment, with just over a billion people. It is made up of a basic plan for the jobless in rural and urban areas, as well as migrant workers, covering more than 550 million people, and an employment-based plan that covers 504 million employees.

The second pillar of China’s pension system is private and employment-based. It is voluntary for companies and covers far fewer people.

The third and most recent, also private and voluntary, is a personal pension. It was introduced in 2022. With the public pension coming under more financial stress, officials started offering tax benefits much like an individual retirement account in the United States.

The rollout of private pensions, which are still in pilot programs in dozens of cities, coincided with alarming news: China’s population was beginning to shrink for the first time in its modern history.

Working professionals like Xuan Lü, 27, are required to contribute part of their salary to one of the public pensions. Mr. Xuan, who is an exhibition planner in Beijing, said he didn’t think too much about the roughly 5 percent of his income that is set aside each month.

“It’s too early to worry about these things,” he said.

But over the past year, another problem has emerged: More people, whether they are unemployed or doing part-time or freelance work, are pausing their contributions or simply opting out.

“The number of people who have decided tactically not to contribute or join the system is quite large,” said Dali Yang, a professor at the University of Chicago. “It has gone up very substantially.”

Experts also caution that if China doesn’t change the retirement age, it will need to reduce the benefits, which they say may be too generous in some cases. In 2022, the national average monthly payment for the public employment pension was $500, and just $28 for the basic state pension. But the contributions and benefits varied drastically depending on the city and province.

There are thousands of different pension plans, and each is managed by a local authority. How much retirees receive is linked to a local government’s finances and the size of a given pool of pensioners. Some pensions have as few as 30,000 participants, according to one study.

In some prosperous regions, as many as eight workers support each retiree. But in poorer areas, there are about two workers for every retiree.

With pressures mounting, worried Chinese officials and experts have taken to nagging young people to save and enroll in the private pension scheme.

One well-known professor has urged young people to skip their daily coffee and put the money into a fund. Another has warned young people that the basic pension will not be enough to survive on when they are old.

For some young people, the urgent calls are backfiring.

Even those a little older are not easy to persuade.

“To be honest, I don’t expect to be living on my retirement salary and covering my future retirement life with it,” said Leon Li, 37, a driver for Didi, China’s equivalent to Uber. Mr. Li lost his job at a market research firm last year after working there for more than a decade. He had a pension with the company that he will continue to pay into for the next two years to meet the minimum 15-year threshold to qualify for benefits after retirement.

By contrast, Cesar Li, 27, hasn’t enrolled in the basic public pension plan because, he said, it is too expensive. Mr. Li, a freelancer, said he had noticed that more older people were claiming pensions and fewer young professionals were paying into the system. He echoed a concern that other young people have expressed — that their retired parents or grandparents sometimes receive twice the salaries of their working family members.

Cesar Li and his friends sometimes discuss the future, he said, and joke about who will take care of them when they are old. “We may end up alone and die at home,” he added.

With fewer young people and more old, the gap between workers and retirees will only get bigger.

“This can only be left to fate,” Mr. Li said. “I have no control over it.”

Li You contributed research.

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Can Martian atmospheric samples provide greater insights into the Red Planet compared to surface samples?

Could Martian atmospheric samples teach us more about the Red Planet than surface samples? This is a question that has intrigued scientists and researchers for years, and a recent study presented at the 55th Lunar and Planetary Science Conference delves into this intriguing topic. The study, conducted by a team of international researchers, aimed to explore the significance of returning atmospheric samples from Mars and how they could provide valuable insights into the formation and evolution of the Red Planet.

NASA is currently focused on returning surface samples from Mars in the hopes of uncovering clues about the ancient history of the planet and the possibility of past life. However, the researchers behind this study argue that atmospheric samples could offer a unique perspective on Mars’ history that surface samples may not be able to provide. To shed light on this fascinating subject, lead author Dr. Edward Young, a professor at UCLA, and co-author Dr. Timothy Swindle, a Professor Emeritus at the University of Arizona, shared their insights with Universe Today.

Dr. Young explains, “We learn a lot about the origin of a planet from its atmosphere as well as its rocks. In particular, isotope ratios of certain elements can constrain the processes leading to the formation of the planet.” This highlights the importance of studying both atmospheric and surface samples to gain a comprehensive understanding of Mars’ geological and evolutionary history.

One of the key motivations behind obtaining atmospheric samples from Mars is to complement the data collected from surface samples. Dr. Swindle elaborates on this, stating, “We need an atmospheric sample to know what the rocks might have been exchanging elements and isotopes with. But we’d also like to have a sample of the Martian atmosphere to answer some basic questions about processes that have occurred, or are occurring, on Mars.” This dual approach could provide scientists with a more holistic view of the complex processes that have shaped the Red Planet over billions of years.

The study outlines several potential benefits of obtaining atmospheric samples, including gaining insights into the Martian interior, evolutionary trends in atmospheric compositions, nitrogen cycling, and sources of methane on Mars. The recent incident with the NASA Perseverance rover, where it inadvertently collected atmospheric gases instead of a rock core sample, underscores the importance of studying atmospheric samples alongside surface samples.

While the idea of returning atmospheric samples from Mars is still in the development stage, the researchers discuss potential methods for collecting these samples. Dr. Swindle mentions two proposed approaches, including flying a spacecraft through the Martian atmosphere to collect samples or using a sample return cannister on the surface of Mars equipped with an air compressor. Although there are currently no concrete plans for dedicated atmospheric sample missions, initiatives like the Sample Collection for Investigation of Mars (SCIM) have previously been proposed.

Looking ahead, the researchers emphasize the value of atmospheric samples in unraveling the mysteries of Mars’ past, including its potential for supporting life. Despite Mars’ current harsh conditions, evidence from past missions suggests a more hospitable environment billions of years ago, with flowing water and active volcanism. The quest to uncover whether ancient life existed on Mars remains a tantalizing prospect, and atmospheric samples could hold vital clues.

In conclusion, the study presents a compelling case for the importance of Martian atmospheric samples in advancing our understanding of the Red Planet’s history and evolution. As Dr. Young aptly puts it, “Only time will tell, and this is why we science!” The ongoing pursuit of scientific exploration and discovery continues to fuel our curiosity about Mars and the broader cosmos, inspiring us to keep looking up and delving deeper into the mysteries of the universe.

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