chinaIt’s now a truism that China will grow old before it grows rich. The pension system is where that abstraction becomes a reality for ordinary Chinese people. China’s elderly dependency ratio, the number of people over 65 per 100 people age 15 to 64, is approaching developed-country levels at 17 and rising (it’s 25.6 in the U.S.) compared with India’s 9.8 and Vietnam’s 11.4. But China’s per capita income—a proxy for the resources from which those workers can support those retirees—is one-sixth to one-fourth the level of a developed country.

This is a political problem for governments everywhere. But the prospect of widespread elder poverty risks becoming an existential threat for China’s Communist Party because the party manufactured this crisis with its one-child policy. That policy has destroyed countless lives and represents a rot eating away at Chinese society from the inside. The pension system is the vector by which a prematurely aging society robbed of its young people will descend into an economic crisis.