It’s happening in Wuhan, this city of 11 million inhabitants in the center of the country, where we remember the Covid-19 epidemic started. For the second time in six days, retirees took to the streets there on Wednesday 15 February. Nothing comparable with the huge demonstrations in France: in Wuhan, the gatherings bring together only a few hundred people. But it is still an event in itself, given the social control exercised in China: demonstrations are extremely rare. On several videos broadcast on social networks, we can clearly distinguish the protesters, men, women, grouped under an air interchange, at the entrance to a famous city park. And we see security guards trying to prevent the rally from progressing. On February 9, the demonstrators were received at the town hall of Wuhan. No incident, all this takes place in peace. But the challenge is there: retirees are protesting against the reduction in the health allowance paid to them each month. This is the consequence of a health insurance reform that has been gradually implemented over the past two years. And the local authorities are helpless in the face of the challenge: the coffers are empty.
Live from #China‘s Wuhan: many retirees in the central Chinese city gathered in a large park today to protest against the government’s move to cut subsidies for their health insurance. pic.twitter.com/0s6mX7czWb
—William Yang (@WilliamYang120) February 15, 2023
Lower health allowance and structural threat to pensions
But the most worrying for Chinese retirees is not this health allowance, it is the medium-term future of their retirement pension. This is a huge challenge for China, a demographic time bomb, on a scale unmatched by the situation in Western Europe. It’s simple: China is aging very quickly. It continues to be home to one-sixth of the world’s population. But it lost 850,000 inhabitants last year, a record for 60 years. The birth rate is at its lowest: barely more than one child per woman, it’s 1.8 in France. And as life expectancy increases, assets will quickly become insufficient to finance pensions. China will lose three million workers a year in the coming decade. However, the current pension system is both unequal and advantageous. Unequal because in the countryside, retirement pensions are often non-existent. And advantageous because the official retirement age, for those who benefit from it, is 60 for men and 55 for women. So this system cannot hold. At the current rate, it will explode in flight.
Accelerated aging
It’s a hot potato, almost a taboo subject in China. As for health insurance, the Chinese power is beginning to reform, discreetly. It paved the way for supplementary funded pensions in certain regions. But it will be difficult to escape a more general reform to extend the contribution period. It is a question of increasing it by one to two months every year. Socially, it’s a stick of dynamite. But conversely, too great an increase in the number of retirees is just as explosive: it can generate strong social tensions between generations, if the elderly all find themselves dependent on families. These Wuhan protests, though small in size, may therefore be a harbinger of a big concern for China.