China is launching the first private pension scheme to deal with economic challenges amid an aging population.

Accordingly, Chinese employees can now contribute to their pension fund. The amount is up to 12,000 yuan (1,860 dollars) a year.

China’s authorities said in a document that some cities would run the new scheme for one year. After that, the government will apply it nationwide.

According to Reuters, independent consultancies expect China’s private pension market to grow rapidly. They estimate that by 2025, the market will reach at least $1.7 trillion, up from $300 billion now.

The South China Morning Post reported that, in 2020, China had 264 million people aged 60 and above. It accounts for 18.7% of the total population.

According to the World Health Organization, 28% of China’s population will be over 60 years old in 20 years. China will become one of the world’s fastest-aging.

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