| Hi, this is Lulu Chen in Hong Kong. This week, we delved into the crisis facing China's pension system. Not only is it struggling to keep up with the country's rapidly aging population, it's also at risk of losing much-needed funding as tens of millions of young people opt out. Among them are a gym trainer, an online influencer and a researcher who moonlights as a tango teacher — just a few examples of workers in China's expanding gig-economy. According to the latest available data, more than 200 million people were classified as "flexibly employed," allowing them to forgo state pension contributions. This represents nearly a quarter of the workforce, and the number could double to 400 million by 2036, according to estimates from Alibaba's research unit. What struck us the most was the level of distrust among these young people. They are uncertain whether there will be enough money when they retire, unsure of how much they can expect to get back, and frustrated by the system's favoritism toward insiders, such as government officials and workers from state-owned firms. Follow The Big Take daily podcast wherever you listen.
If people in their prime years refuse to put money in, it will only worsen the problems confronting China's state pension system, especially with a shrinking population and an aging society. The simple reality is that more people will need support, while fewer are contributing to the pool. A large wave of workers is approaching retirement. By 2035, it's projected that around 29% of China's population will be over 60, with more than 20 million workers expected to retire annually over the next decade. The government is well aware of the challenges, which is why it has been introducing two other options that give people more control over how they manage their retirement savings. It has also vowed more reforms. Time is ticking. The largest portion of the state pension system is expected to run dry by 2035, according to estimates from the Chinese Academy of Social Sciences. Hear it from Gao Pengcheng, a 22-year old social media influencer, who says paying into the fund is pointless and that he'd rather spend the $200 monthly contribution on dining out or buying a new handbag. "In theory, you are saving for your retirement. In reality, you are using your money to support someone else," Gao said from Shenzhen, where he peddles baked goods and cosmetics online. "Why would I use my money to support another person?" What We're Reading, Listening to and Watching: China rolled out the welcome mat to foreign tourists when it started easing visa requirements for 1.9 billion potential visitors from scores of countries. Yet only a fraction of the hoped-for tourists have come. Since mid-2023, China's enacted more than a dozen rounds of visa waivers to an ever-widening number of nations. It unilaterally extended visa-free entry to citizens of 38 countries, something it was reluctant to do before the pandemic and had only previously allowed for visitors from Singapore, Japan and Brunei. Now, travelers from another 54 nations can stop in for limited visits of 10 days or less before they head to other destinations. The huge influx of foreign tourists and the billions of dollars in spending they could have brought simply hasn't materialized, a Bloomberg analysis shows. Read our story about why that is here.  Tourists visit Mount Fanjing in Guizhou province. Photographer: VCG/Visual China Group Yet visitors from the US and most of Western Europe — where political and trade spats with Beijing simmer – have stayed away. Instead, tourists from nearby Asian countries and less-developed markets have turned up. Foreign visitor entries to China totaled just under 23 million in the first three quarters of 2024, according to an analysis of government data. While that's roughly double 2023's low base, it's still only 63% of the level in the same period in 2019 and well short of the near full recovery Beijing wanted when it started easing visa rules. There's myriad reasons why: far fewer international flights from overseas airlines, changing economic and political ties, and a deteriorating perception in the West of China. For Beijing, the ramifications go beyond the lost billions in tourism dollars. It undercuts President Xi Jinping's call for more people-to-people exchanges, and is a missed opportunity to change much of the world's negative perceptions of the country before tensions likely flare anew when President-elect Donald Trump returns to the White House. | 
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