## Population Aging and Pension Reforms in China

_IMF Working Papers, February 20, 2026_

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**Canonical URL:** [Population Aging and Pension Reforms in China](https://www.imf.org/en/publications/wp/issues/2026/02/19/population-aging-and-pension-reforms-in-china-574061)

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## Bibliographic details
- Authors: Boele Bonthuis, Yongquan Cao, Christoph Freudenberg
- Published: February 20, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229038522.001

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### Executive summary and context
- China is experiencing rapid population aging and a declining workforce, posing significant economic and fiscal challenges, especially to the pension system.
- The paper examines the evolution of China’s pension system, assesses its gaps relative to international peers, and evaluates the macro-fiscal implications of population aging and various pension reforms.
- Analysis uses a calibrated overlapping generations model that explicitly incorporates rural–urban disparities.

### Key projections and quantitative findings
- Population aging alone can slow annual GDP growth by about 2 percentage points between 2024 and 2050.
- Pension spending can rise by nearly 10 percentage points of GDP due to population aging.
- The 2024 retirement age reform:
  - Raises GDP growth by 0.2 percentage points annually.
  - Reduces pension spending from 15.3 percent to 11.9 percent of GDP by 2050.

### Reforms and scenarios evaluated
- Doubling Residents Pension Scheme benefits (described as currently inadequate).
- Linking pension benefits to life expectancy.
- Further increasing the retirement age beyond the 2024 reform.
- Promoting urbanization to address rural–urban disparities and labor supply dynamics.
- The calibrated overlapping generations model is used to quantify effects of these policy-relevant reforms on fiscal and macroeconomic outcomes.

### Policy implications and findings
- Population aging presents material downside risks to growth and large upward pressures on pension spending absent reform.
- The 2024 retirement age reform materially eases long-term growth and fiscal sustainability pressures but does not fully offset aging-induced fiscal pressures.
- Reforms targeting Residents Pension Scheme adequacy, life-expectancy indexing, retirement ages, and urbanization can have significant effects on both fiscal balances and macroeconomic outcomes.

### Publication metadata (from the source)
- Authors: Boele Bonthuis, Yongquan Cao, Christoph Freudenberg
- Date: February 20, 2026
- Pages: 34
- Series: Working Paper No. 2026/027
- DOI: https://doi.org/10.5089/9798229038522.001

*Population Aging and Pension Reforms in China — Boele Bonthuis, Yongquan Cao, Christoph Freudenberg (February 20, 2026).*

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_Source: https://www.imf.org/en/publications/wp/issues/2026/02/19/population-aging-and-pension-reforms-in-china-574061_