China social security and pension system expansion

China is implementing measures to expand its social security coverage and long-term care insurance (LTCI) systems. The Ministry of Human Resources and Social Security plans to utilize big data to identify uninsured individuals, aiming to maintain a basic pension insurance participation rate above 95% during the ‘15th Five-Year Plan’ period. This strategy seeks to transition flexible and migrant workers from resident pension insurance to employee pension insurance to increase contribution levels.

As LTCI moves toward nationwide implementation, the system faces several structural challenges, including a heavy reliance on medical insurance funds, funding disparities between cities, and inconsistent coverage in rural areas.

To ensure compliance, new regulations under the ‘National Tax Administrative Penalty Discretionary Standards (2026 Edition)’ will allow for fines up to three times the amount of unpaid contributions. These reforms occur amid demographic shifts, with the population aged 60 or older expected to grow significantly by 2036, placing increased pressure on pension fund solvency and the ratio of contributors to beneficiaries.