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What Happens When China Goes 'Gray'?

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This photo taken on April 16, 2011 shows former Red Army soldier Pan Xianying, one of three remaining members of a famed Communist all-women army unit, as she sits in her room at a settlement near the city of Qionghai on the southern Chinese island of Hainan. (Ed Jones/AFP/GettyImages) | Getty Images

As China's major trading partners try to control rising public pension and health care costs, they may not realize they also have an important stake in China's ongoing struggle to fashion a safety net for its own rapidly aging population. Many observers assume China has no pensions or healthcare insurance for the 185 million people over the age of 60 (13.7% of population), the highest official retirement age for most workers. They may well believe this explains why Chinese families save so much–more than 30% of household income–and therefore spend less on consumer goods, including imports from trading partners.

Read the whole story at The Diplomat