- But two broader challenges highlighted by the pension crisis are particularly intractable in China. One is the central government’s historical struggle to keep the wealthier coastal regions aligned with the rest of China – one of the country’s core geopolitical imperatives. The more acute coast-interior disparities become, the more wealth the coasts will be asked to transfer to the interior, and the more coastal resistance to Beijing’s writ there’s likely to be.
The second is the scope of the grand bargain the Communist Party has made with the Chinese public – and the extraordinary degree of risk embedded in this social contract. Essentially, Beijing gets full rights to micromanage the Chinese people. In exchange, it takes on full responsibility for the welfare of the people. In other words, when the state demanded they do so, hundreds of millions of Chinese citizens gave up the right to have multiple children who, in keeping with core Chinese values, would see to their care in their golden years. Now, they’re finding the state may force them to spend these years destitute and alone. When Beijing scaled back the state sector, hundreds of millions left the interior to work in manufacturing on the coasts, propelling China toward untold wealth and global influence. Now, they’re finding that the state has neglected to make those who’ve gotten rich off their labor contribute their share to the social safety net – and that Hukou, a system designed for social control, is preventing them from getting what’s theirs.