Pension gap to hit $2.87 trillion

China's pension shortfall is expected to reach 18.3 trillion yuan ($2.87 trillion) by 2013, said a newly released report.

To relieve the pressure, the retirement age in Chinese should be raised, and the reform of official institutions further deepened, the report said.

"Under the impact of an aging population, China's pension expenditures are causing a huge burden to State finances," it said.

The Ministry of Resources and Social Security is discussing raising the retirement age, a move opposed by 90 percent of netizens, Guangzhou-based Time Weekly reported on June 13.

The report was written by the Bank of China's research group headed by its chief economist Cao Yuanzheng, and Fudan University's research group headed by Deutsche Bank's economist Ma Jun.

Under the current pension system, the pension gap is likely to hit 18.3 trillion yuan by 2013, and the gap will grow year after year, said Cao.

"Suppose the annual rate of GDP growth was 6 percent. China's pension shortfall would reach 68.2 trillion yuan by 2033, accounting for 38.7 percent of the year's GDP," she said.

The report said that the fiscal subsidies needed for the pension system is likely to rise continuously from 2017, and the pension shortfall will account for more than 20 percent of fiscal spending in 2050.

There are now 130 million people in China above 65 years old. That will reach 332 million by 2025, accounting for more than 23 percent of the population.