Target loopholes in pension system first

Astitch in time saves nine is an adage that should be borne in mind when it comes to China's cash-hungry pension system.

By 2011, China had a gap of 2.2 trillion yuan ($355 billion) in its pension accounts, according to a report by the Chinese Academy of Social Sciences. Dai Xianglong, Party chief of the National Social Security Fund, has mentioned a similar figure in interviews with the Chinese media.

The gap is largely a result of China's pension reform in 1997, when it started to establish a unified national pension system. A large number of retirees at that time began to receive pensions from their accounts, which were actually empty. The country has had to use the pension accounts of young working adults to pay for them, which has resulted in the gap.