They Built China With Their Land and Sweat-It’s Time to Raise Their Pensions

Rural Pensions Average Just 200 Yuan a Month. At the Two Sessions, Delegates Are Pushing for More

China's pension system covers over a billion people, but behind that number lies a stark urban-rural divide. Data from Yingtan, a prefecture-level city in Jiangxi Province, puts this in sharp relief. An official notice published in January 2023 stated that retired government employees there received an average pension of 5,080.15 yuan per month, enterprise retirees received 2,368.87 yuan, and rural residents enrolled in the urban-rural resident pension scheme received just 207.11 yuan.

For a long time, there’s been a objection to raising rural pensions, saying that farmers never paid their share of insurance. I don’t think it stands at all. Chinese farmers gave up what was originally private ownership of their land, and that became the very foundation of the land finance model powering China's urbanisation. For decades before that, farmers also paid through the industrial-agricultural price scissors, subsidising industrialisation by artificially suppressing crop prices. China's development was built on the cumulative sacrifice of its rural population, and the value of that sacrifice cannot be overstated.

Increasing the rural pension has also been advocated by multiple deputies to the National People's Congress and members of the Chinese People's Political Consultative Conference during the ongoing Two Sessions.

Economist Lu Ming, who wrote the famous book Mega-Nations, Dynamic Metropolises 大国大城  briefed Xi on the 14th FYP in 2020 and Premier Li in 2023, is also a member of the national CPPCC. In his latest post, he said that many children of rural families, after starting their careers, give their parents a monthly allowance that is far lower than the social insurance contributions they make each month. These contributions, in turn, are used to pay pensions to those eligible for retirement benefits. As a result, the monthly financial support these young people provide to their own parents is much lower than the pensions they effectively pay to other, unrelated elderly individuals.

By his count, nine other delegates also raised the issue.
Bi Lixia, the chairperson of the Jinghua Rice Planting Professional Cooperative in Jianli City, Hubei Province, stated,

I earnestly request that the Ministry of Finance, the Ministry of Human Resources and Social Security, and the Ministry of Civil Affairs increase the monthly pension for rural residents aged 70 and above to 400 yuan.

Lei Maoduan, Party branch secretary and village committee director of Goudong Village in Sanluzhen Town, Yanhu District, Yuncheng City, Shanxi Province, stated

It is recommended to raise the basic pension for farmers from the current 100-plus yuan to over 500 yuan. Although farmers have not paid into the social insurance system with cash, they have contributed through grain, labor, and essential resources... There are 54 million farmers aged over 70 in China. Increasing their pension to 500 yuan per month would cost the state an additional 230 billion yuan annually, accounting for 0.83% of the national general public budget expenditure. With less than 1% of state expenditure, we can achieve the satisfaction and tangible benefit of 100% of the people.

Guo Fengjian, Party branch secretary of Dazhai Village in Xiyang County, Shanxi Province, remarked

“The rural pension is very low, only 200 yuan a month, and farmers even have to contribute a portion themselves first, which is quite unfair to them.” “Could it be raised to 500 yuan?” “We need to turn online attention and public discourse into tangible care and warmth.”

Zhang Xuewu, chairman of Hunan Yanjin Shop Food Co., Ltd., and Zhu Xiaokun, chairman of the board of Jiangsu Danyang Tiangong International Co., Ltd., both suggested increasing the monthly pension for farmers to 1,000 yuan within five years.

Yin Yong, head of the Guiren Branch of Sihong County Post Office in Jiangsu Province, voiced his opinion: “The adjustment of the basic pension should be linked to the consumer price index and the growth rate of rural residents’ per capita disposable income.”

Furthermore, three other deputies to the National People’s Congress—Lu Qingguo from Hebei, Shen Changjian from Hunan, and Zhang Yi from the Chinese Academy of Social Sciences—have also spoken out on behalf of the welfare of elderly farmers.

Wang Mingyuan, a researcher at the Beijing Reform and Development Research Association who previously worked at the China Society for Economic System Reform. Wang has long made a similar case. A senior scholar of Reform and Opening Up history, he has documented in detail the mechanics of how rural China subsidised the nation's industrialisation, from the price scissors to the land transfers. And I believe his latest op-ed, published on Phoenix New Media, is worth reading, in which he explains why rural residents should receive higher pensions.

Below is Wang's full text. I want to thank him for kindly authorizing me to put his piece into English:

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Working Beyond Retirement in Rural China: Are Farmers Entitled to Higher Pensions?

“Retired but Still Working” — The Reality for China’s Rural Population

I made two trips back to my hometown in southern Shandong around the Spring Festival this year, and spent time with many of my fellow villagers. What struck me was how universally people continue to work well past retirement age. With the rare exception of retired public school teachers or those lucky enough to have children who are very well off, virtually every person over 60 engages in physical labour for as long as their body holds up, simply to make ends meet. They farm, pick up odd jobs at small village factories, or work at local trade markets. The oldest worker I came across was a grandmother surnamed Ren, born in 1939, who spends summer and autumn doing packaging work at the village vegetable market. She never misses a chance to tell visitors, with evident pride, that she makes over 10,000 yuan a year.

Those unfamiliar with rural China might be tempted to write this off as a peculiarity of impoverished backwaters. In fact, the counties surrounding my hometown rank somewhere between 150th and 300th nationally in county-level economic output — placing them squarely in the upper tier of rural China by income. This is not an outlier. Having conducted fieldwork in rural communities across the country, I can say with confidence that what I see among the elderly in southern Shandong is simply a snapshot of what is happening everywhere in the Chinese countryside.

The Seventh National Population Census of 2020, which broke down employment by industry and age cohort, offers a fuller statistical picture. That year, 177.15 million people were employed in agriculture, forestry, animal husbandry, and fishery. Of these, 60.5% were over 50, 29.1% were over 60, and 9.2% were over 70. Put differently, 51.55 million people past the conventional retirement age of 60 were still working the land, including 16.29 million aged 70 or older.

The rural population continues to age, and although employment in these primary industries has shrunk somewhat in recent years — by around 8% — I have no doubt that the number of over-age workers still comfortably exceeds 50 million today.

It is also a mistake, as many do, to treat the rural pension problem as concerning only those elderly who actually live in the countryside. China’s permanent rural population stands at 491 million, but 792 million people hold rural hukou (household registration). The gap means that roughly 300 million rural hukou holders live permanently in cities. The large contingent of ageing migrant workers is itself a critical dimension of the rural pension crisis.

According to the National Bureau of Statistics’ 2024 Migrant Worker Monitoring Survey, China had 297.53 million migrant workers with an average age of 43.2; 31.6% of them were over 50. The survey does not give a precise figure for those over 60, but cross-referencing with census data — which shows that 50-to-59-year-olds accounted for 20.8% of all urban employment — suggests that approximately 10.8% of migrant workers, or around 32.14 million people, had passed 60.

To get a ground-level sense of this, I visited day-labour markets at Majuqiao马驹桥 and Liangxiang良乡 in Beijing, Xiaozhan in Tianjin天津小站, and Xiasha in Hangzhou杭州下沙. At every site, elderly workers were out in force. As private-sector employers have tightened their hiring standards, it has become increasingly hard for anyone over 60 to land a regular job, pushing them into the casual-labour market. Walk around any major Chinese city and you will notice it yourself: ageing security guards in residential compounds, elderly restaurant servers, older domestic workers. A national figure of 20 to 30 million elderly migrant workers at the lower end of old age is entirely plausible.

Tallying everything up and drawing on the most recent data available (2024 employment figures), I estimate that roughly 82 million rural hukou holders aged 60 and above remain in the workforce. With the total elderly rural hukou population at approximately 130 million, that implies a labour participation rate of 63% among the rural elderly.

Factor in census undercounting and elderly people engaged in occupations that slip through the statistical net — street vending, taxi driving, and the like — and I believe the true rate is closer to 70–75%. Go one step further and exclude the roughly 17 million rural residents over 80 who have lost the ability to work, and among the remaining 113 million people aged 60 to 80 who retain some capacity for labour, a staggering 80–90% still have to keep working.

The Third National Time Use Survey, released by the National Bureau of Statistics in 2024, supports this estimate. At the time of the survey, China’s elderly population stood at around 300 million, of whom 36.3% — roughly 109 million — were engaged in paid work. Subtract the estimated 15 to 20 million urban hukou holders working past retirement (discussed in detail below), and the figure for rural hukou elderly in paid employment comes to approximately 90 million.

What makes these numbers so striking is the gulf between rural and urban areas. The Fourth China Urban Labour Force Household Survey (CULS4), conducted by the Chinese Academy of Social Sciences in 2016, found a labour participation rate of just 4.2% among urban retirees. A household survey by the Wuhan Municipal Bureau of Statistics at the end of 2014 put the rate for those 65 and older at a mere 2.5%. Census data on employment age structures across industries show that secondary and tertiary sectors together employed 14.84 million people past retirement age. Even if every one of them were an urban hukou holder with no migrant workers in the mix, that would represent only 10.3% of the urban elderly population of 143 million.

International comparisons are also illuminating. Although overseas studies on post-retirement labour participation generally use 65 as the threshold — making direct comparison imperfect — the contrast is telling. Japan leads the developed world at 25.2% (2023), followed by the United States at 18%. Germany, Italy, and France are all below 10%.

By any measure, the labour participation rate among China’s rural elderly is grotesquely high — an anomaly. Among countries at a comparable or higher stage of development, China’s rural elderly are almost certainly the most overworked retirees on the planet.

Abysmally Low Rural Social Security Benefits Are the Main Driver

Why are elderly farmers still doing backbreaking physical work? The most direct and fundamental reason is that pension benefits for rural hukou holders are woefully inadequate. In 2024, the national minimum standard for the Urban-Rural Resident Basic Pension Insurance paid to farmers was 123 yuan per month — subsequently raised to 143 yuan in 2025 and 163 yuan in 2026.

According to the 2024 national social insurance fund settlement, the average per capita payout under this pension scheme was about 203 yuan per month. But this figure is inflated by the inclusion of nearly 40 million non-employed urban residents whose benefit levels are far higher than those of farmers. A realistic estimate of the actual monthly pension received by farmers would be closer to 180 yuan. On top of this, the average rural resident holds about one mu (roughly one-sixth of an acre) of land, yielding around 500 yuan per year in rental income — a form of property-based income that can be treated as a modest, stable guarantee from the state. All told, the two sources amount to approximately 2,660 yuan per year.

Now consider the other side of the ledger. The Fifth National Sample Survey on the Living Conditions of Urban and Rural Elderly, published jointly in October 2024 by the Ministry of Civil Affairs, the National Committee on Ageing, the National Health Commission, and the Ministry of Finance, found that the average annual routine expenditure of rural elderly was 6,734 yuan. This means that social security and property income together replace only about 40% of basic spending needs — a far cry from the 88% replacement rate enjoyed by their urban counterparts from the same two sources of income. Farmers who reach retirement age simply cannot afford to stop working. Doing so would put their survival at risk.

The same survey also found that 73% of rural elderly receive financial support from their children or grandchildren, averaging 3,280 yuan per year. This in itself tells us that the vast majority of rural elderly cannot sustain themselves on social security alone. For context, the Survey of Income and Program Participation released by the U.S. Census Bureau in May 2025 reported that only 4.3% of elderly Americans — 2.4 million out of 55.8 million — relied on intra-family transfers. Cultural norms around filial piety certainly account for part of the difference, but the adequacy of the pension system is the decisive factor.

Healthcare is another major drain on elderly finances. In 2024, urban residents nationwide received an average of 5,497 yuan per person in medical expense reimbursements, compared to just 1,125 yuan for rural residents. Rural elderly shouldered out-of-pocket drug costs averaging 1,906 yuan per year — a crushing burden that exceeds 33% of their median income (5,640 yuan). For urban elderly, out-of-pocket costs of 2,326 yuan represented just 8% of their median income (28,800 yuan).

The extent of the disparity becomes even starker when you examine the three social insurance fund ledgers side by side. According to the 2024 national social insurance expenditure settlement, pension payouts for 112 million retired urban enterprise workers totalled 4.99 trillion yuan, or an average of 3,712 yuan per month per person. For the more than 21 million retired civil servants and public institution employees, the total was 1.76 trillion yuan — an average of 6,984 yuan per month. Meanwhile, the Urban-Rural Resident Basic Pension fund, which covers 180 million recipients (both rural elderly and non-employed urban elderly), disbursed a mere 439.1 billion yuan in total, excluding individual accounts. These 180 million recipients outnumber the combined total of retired enterprise workers and civil servants by a factor of 1.35, yet the money spent on them amounts to just 6.5% of what the other two groups receive. The average monthly benefit trails enterprise retirees by a factor of 18 and government retirees by a factor of 34.

In short, although China has been operating essentially as a market economy since the late 1990s, its pension and healthcare systems remain rooted in the dual-track urban-rural framework inherited from the planned-economy era — or more precisely, a three-track hierarchy of cadres, enterprise workers, and farmers. The result is a deeply lopsided allocation of social security resources, skewed toward urban residents and those inside the state apparatus. This structural imbalance is the root cause of the abnormally high labour participation rate among the rural elderly.

III. Have Rural Elderly Earned the Right to a Decent Pension?

Whenever economists call for higher pension benefits for farmers, a predictable chorus of objections follows: farmers never paid into the pension system, so what entitles them to draw from it? Some go so far as to accuse such advocates of deliberately maligning China’s welfare system and fomenting social discord.

My answer is this: while it is true that farmers did not, for a very long time, pay into the social insurance pool in the formalised way that urban workers did, they made extraordinary — indeed, superhuman — contributions to China’s modernisation that functioned as a form of implicit social security payment. They have more than earned their right to pension compensation.

The first and most obvious of these contributions lies in the price scissors between industrial and agricultural goods during the planned economy era. For decades, farmers were compelled to sell their produce at artificially suppressed prices, subsidising the state’s industrial build-up at enormous personal cost. According to Professor Yan Ruizhen of Renmin University of China, a recipient of the prestigious Sun Yefang Prize in Economics, from 1953 to 1985 the state extracted roughly 24 billion yuan per year from farmers through this price gap — a figure roughly equivalent to total capital construction investment during the same period.

The joint research group on “Agricultural Investment,” organised under the CPC Central Committee Policy Research Office and the State Council Development Research Centre, estimated that during 1950–1978, the government reaped approximately 510 billion yuan through the industrial-agricultural price scissors. After the Reform and Opening Up began, the absolute magnitude of the scissors actually widened: a further 1.5 trillion yuan was extracted from 1979 to 1994. This pricing distortion did not substantially disappear until the early 2000s. As a rough guide, the scissors averaged around 25% of total agricultural output value before reform and about 10% afterward.

The second contribution was the crushing burden of agricultural taxes, fees, and unpaid labour. Between 1949 and 2005, Chinese farmers paid a cumulative total of over 420 billion yuan in formal agricultural taxes. But the various village- and township-level surcharges — the “three deductions and five charges,” administrative fees, compulsory fundraising, and fines — amounted to at least twice that sum. The imputed wages for conscripted farm labour used to build water conservancy and transportation infrastructure (which totalled 30 billion work-days from 1950 to 1978 alone) were of a similar order of magnitude. Together, these three categories add up to at least 1.68 trillion yuan. Moreover, based on the official statement that “following the complete abolition of the agricultural tax in 2006, the annual burden on farmers was reduced by approximately 125 billion yuan,” we can calculate that over the 28 years of the reform era alone, farmers’ cumulative excess taxes, fees, and compulsory labour amounted to well over 3 trillion yuan — roughly 15% of their total income.

The third contribution comes through rural land expropriation. From 1999 to 2025, local governments across China collected a cumulative total of approximately 83 trillion yuan in land transfer revenues, of which roughly 90% derived from the conversion of expropriated farmland into urban construction land. About 50% of these revenues went toward demolition and resettlement compensation, and roughly 10% was channelled into rural construction and affordable housing projects.

That leaves approximately 40% — some 33 trillion yuan — absorbed into urban construction and general government spending. Over the past two decades, land transfer revenues have consistently accounted for 20–30% of local government income. This represents another massive contribution from rural China, one that continued long after the formal obligations of agricultural taxes and corvée labour had been abolished.

In sum, for nearly eight decades since the founding of the People’s Republic, farmers have continuously sustained the country’s modernisation through contributions that far exceeded what could reasonably be asked of them. The share of their labour and property income surrendered without compensation is no smaller than the social security contribution rates paid by urban workers. Farmers have every right to receive pension benefits with broad coverage.

IV. Non-Contributory Pensions as a Growing Global Norm, and What China Should Do

Even leaving historical debts aside, there is a straightforward principle of modern governance at stake: all citizens of a country, regardless of whether they live in a city or the countryside, regardless of gender or ethnicity, and regardless of whether they have paid into a pension scheme, should be entitled to a fair share of a universal public pension — sometimes called a national pension or citizens’ pension. This is a basic obligation of the modern state.

As far as I can determine, Sweden was the first country to establish such a system. As early as 1913, the Swedish parliament legislated that anyone who had lived in Sweden for at least 40 years or worked for more than 30 was entitled to a pension from the age of 66, set at roughly 20% of the prevailing average wage. By 1959, this had been raised to 66%.

Britain followed in 1946 with its universal State Pension. France (1956), the Netherlands (1957), West Germany (1957), and Japan (1959) subsequently established national pension frameworks that included farmers. Among developing nations, Mauritius (1950), Brazil (1963), Suriname (1973), Chile (1974), Turkey (1976), and Malaysia (1982) all built universal public pension systems of varying generosity.

A 2018 report by the International Labour Organization found that of 186 countries and territories surveyed, 114 had established non-contributory pension schemes, with average benefits equivalent to roughly 16% of per capita GDP. In most developed OECD nations, the figure reaches about 30% — for instance, approximately 1,095 USD per month in Australia and 1,201 USD per month in the Netherlands.

For China, I believe the most instructive comparisons come from Latin American countries at similar stages of development. Brazil has 26 million people living in rural areas — a significant number — and its national pension coverage reaches 90%, with benefits of 330 USD per month as of 2015. Suriname (coverage above 80%) and Uruguay (coverage 92%) have similarly built universal pension systems in their rural areas, paying 152 USD and 262 USD per month respectively (Qi Chuanjun, 2020).

Taiwan region offers another valuable reference point. Like the mainland, Taiwan once restricted retirement pensions to urban workers with formal employment. Starting in 1995, it began extending pension payments to farmers, and in 2008 it folded them into a comprehensive National Pension system through the Old Farmer Allowance, currently set at 8,110 New Taiwan Dollars per month (roughly 1,930 RMB).

Building a public pension system for rural China that matches the country’s level of development is no longer optional — it is overdue. The government should draw up a clear, publicly announced roadmap with specific targets, much as it does for industrial policy, to give people confidence that change is coming.

Members of the National People’s Congress and economists periodically float proposals to raise rural pensions to 1,000 yuan in one stroke. I believe that a foundational welfare programme of this kind cannot be built overnight. A more prudent path would be to raise rural pensions to 400 yuan per month over the next five years and to 800 yuan per month within ten years, achieving a replacement rate of about 60% of routine daily expenditure for the rural elderly. Combined with land rental income, support from children, and some light work, this would be enough to meet basic needs.

This is hardly an ambitious target. Even at 800 yuan per month by 2035 — roughly 120 USD per month, or 1,440 USD per year — and with China’s per capita GDP expected to surpass 20,000 USD by then, that would represent just 7.2% of per capita GDP, an extraordinarily low figure by international standards.

Nor is it beyond China’s fiscal means. Assuming a rural elderly population of 180 million by 2035, national GDP of 200 trillion yuan, and fiscal revenues of 40 trillion yuan, even an 800-yuan monthly pension would cost a total of 1.73 trillion yuan — less than 0.9% of GDP, or 4.5% of fiscal revenue. That is roughly equivalent to the 2025 pension expenditure for retired government and public institution employees, and about 35% of what is spent on enterprise worker pensions.

Raising farmers’ pensions is, among the many unavoidable challenges China faces, quite possibly the easiest to accomplish. And it would not merely be a fiscal obligation — it would be a powerful stimulus to consumption and economic vitality, delivering two benefits for the price of one. Many of these farmers are already very old. The compensation they are owed should not be deferred any longer. Every year of delay is a year too many.

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References:

Office of the Leading Group for the Seventh National Population Census of the State Council, 2020 China Population Census Yearbook (Beijing: China Statistics Press, 2022).

Nie Aixia, Non-Contributory Pensions: Policy Trends and Reflections for China (Beijing: China Social Sciences Press, 2020).

Taiwan Research Institute, Study on Sweden’s Implementation of the NDC Pension System (2010).

Fang Lianquan, “Implications of Latin American Non-Contributory Pension Systems for China’s Rural Pension Reform,” http://ilas.cssn.cn/xschengguo/xslunwen/201902/t20190219_4831024.shtml

Yan Ruizhen et al., “The Current State, Development Trends, and Countermeasures for the Industrial-Agricultural Price Scissors in China,” Economic Research Journal, No. 2 (1990).

Joint Research Group on “Agricultural Investment,” “Agricultural Protection: Current Conditions, Rationale, and Policy Recommendations,” Social Sciences in China, No. 1 (1996).

Qi Chuanjun, “The Development of Brazil’s Non-Contributory Pension and Its Implications for China,” Working Paper, World Social Security Research Centre, Chinese Academy of Social Sciences (2020).