China may materially raise pensions for rural residents in the next five years, David Daokui Li and Song Xuetao say
In a few days, we’ll find out whether I was decoding subtle signals — or just hallucinating trillion-yuan headlines.
The 20th Central Committee of the Communist Party of China will convene its Fourth Plenum in Beijing from October 20 to 23, which will produce a recommendation for the 15th Five-Year Plan (FYP) for Economic and Social Development (2026-2030), slated for adoption by the National People’s Congress in early March 2026.
Up to this point, I’m not aware of any concrete details on the recommendation for the 15th FYP reported in either Chinese or international media.
So I’m here making a bold call based on admittedly thin open-sourced information: China may materially raise pensions for rural residents in the next five years.
Long-time readers know this is a subject dear to my heart, as I have covered it in August, March, and January.
China’s state-run 城乡居民基本养老保险 Basic Pension Insurance for Urban and Rural Residents covers 180 million Chinese citizens, mostly rural residents. In 2024, they got 532.2 billion yuan from the scheme, averaging 246 yuan ($34.52) per month.
That’s apparently too low, and opinion leaders, including David Daokui Li at Tsinghua University and retired ministerial-level officials, have been publicly calling for a material raise.
Nine days ago, David Daokui Li - in my perhaps overly sensitive eyes, suspiciously - aired a piece on improving pensions for rural residents on his video channel on Chinese social media. (Someone has uploaded it to YouTube.)
Compared with his other videos, this one stands out because Li typically just sat in his Academic Center for Chinese Economic Practice and Thinking (ACCEPT) at Tsinghua University giving a monologue. In this one, he began by amateurishly interviewing Mr. Su, a bike repairman Li knew for years outdoors.
Li basically coaxed Mr. Su to say he, in a few years, would only get less than 300 yuan in pension which wouldn’t be nearly enough for retirement. Then, Li gave a monologue, repeating his long-standing public call to give 180 million fellow countrymen like Mr. Su a raise.
Unsurprisingly, this video didn’t register as a hit at all. Li, apparently deeply invested in this social justice cause, has talked about it before, as ministerial-level officials have done. The fiscal commitment would be in the trillions, as Li admitted later in the video
If we raise their monthly pension from 200 yuan to 1,000 or 1,500 yuan, that’s only about 1 to 1.5 trillion yuan a year in total.
But that’s no big deal, Li insists
That’s roughly twice what we spend annually on building reservoirs—surely affordable
By now, it’s still just a prominent economist publicly lobbying - or pressuring, one could say - the Chinese authorities on a policy issue, which shouldn’t raise any eyebrows.
But literally the last sentence from this Harvard-trained PhD at Tsinghua University, with unfathomable logic and uncanny confidence, caught my attention.
“So this part may become a key policy direction in the future 15th Five-Year Plan.”
(Yes, my China-watching in this piece is basically David Daokui Li video-watching.)
I then Googled around a bit, and found out Song Xuetao, chief economist of Guojin Securities, has been the following for two months now
Via China News Service, a state-run news outlet in August
Reforming the pension system for rural residents is also expected to become a key task in strengthening social security during the 15th Five-Year Plan period. Given the low income levels and high propensity to consume among rural residents, raising the basic pension for urban and rural residents would not only help narrow income disparities but also serve as a short-term measure to boost domestic demand. Fiscal spending in this area is expected to increase during the 15th Five-Year Plan period.
And again via Ta Kung Pao in September, the Hong Kong newspaper known to speak for Beijing
Pension reform for rural residents is expected to become a key task in strengthening social security during the 15th Five-Year Plan period.
According to the 2024 Statistical Bulletin on the Development of Human Resources and Social Security released by the Ministry of Human Resources and Social Security, a total of 540 million people nationwide are enrolled in the Basic Pension Insurance for Urban and Rural Residents, among whom 180 million actually receive benefits. In 2024, total expenditure from the fund reached 532.2 billion yuan, with an average monthly pension of 246 yuan per person.
Given the relatively low income levels and high propensity to consume among rural residents, raising the basic pension for urban and rural residents would not only help narrow income disparities but also serve as an effective short-term measure to boost domestic demand. Fiscal spending in this area is expected to increase during the 15th Five-Year Plan period.
He was not citing any sources at all.
He was speaking as if he was a source.
Below is the transcript of the 4-minute video by David Daokui Li nine days ago.
Li Daokui:
Hello, Mr. Su! It’s been a long time. Take a look at my bike again, will you? It’s been over ten years now. Back when LeEco made TVs, they also made bicycles—but of course, the company went bankrupt later. Mr. Su, you’re from Shandong, right? We’ve known each other for more than twenty years, haven’t we?
Mr. Su:
Yes, I used to fix bikes at Tsinghua’s south gate.
Li Daokui:
The south gate is the one most used by our students and faculty. Back then, everyone rode bikes—there were no shared bikes yet. Every time I went out, I’d stop by your place, leave the bike there, get it fixed, or pick it up after you repaired it.
Mr. Su:
Most of my customers were regulars.
Li Daokui:
You even had a little dog then.
Mr. Su:
I sent it back to my hometown in the end.
Li Daokui:
Still alive?
Mr. Su:
Yes, but it’s lost all its teeth now—getting old, nearly fifteen years.
Li Daokui:
Did you find it on the street?
Mr. Su:
No, it came to me. I drove it away that night, but it came back—it just wouldn’t leave.
Li Daokui:
Kind-hearted, you are. Your kid was small back then—now in college, right?
Mr. Su:
Yes, at Qingdao University.
Li Daokui:
And your wife went home to take care of your elderly parents?
Mr. Su:
Yes, they’re both in their eighties now and not in great health.
Li Daokui:
You and another person run the shop together?
Mr. Su:
We manage somehow. It’s a public-service kind of job—you can’t say business is great, but we do what helps people. You don’t do this for big money, but it suits me.
Li Daokui:
Are you heading back soon to look after the elders?
Mr. Su:
Yes, my parent is eighty-two. Chemotherapy isn’t possible anymore—they won’t even give it. Just conservative treatment now; there’s really no other way.
Li Daokui:
Will you retire after going back?
Mr. Su:
Well, there’s the basic pension. After sixty you get maybe three or four hundred yuan a month. I haven’t claimed it yet, but it won’t be enough for old age.
Li Daokui:
Friends, right now I’m standing in Tsinghua University’s faculty and staff residential area. It houses not only teachers and students but also workers—over a hundred thousand people altogether. It’s really a big community.
To keep this community running smoothly, many migrant workers contribute—people who fix our computers, apply screen protectors, do tailoring, repair shoes and bicycles. Nearby we also have canteens and bakeries and so on. They all work very hard. I have many of their WeChat contacts saved: whenever my computer breaks, my phone stops working, my shoes tear, or my clothes need mending, I call them. They are my friends, and I know a bit about their lives.
These people have worked at Tsinghua for many years. With their own hands, they have supported their families and raised their children. Usually their kids can attend primary school here in Beijing, but for middle school they must return to their hometowns. The craftsman I just spoke with—Mr. Su—his child is now in college, which is good news. But many of these migrant workers are now in their fifties or nearly sixty, and their work is becoming physically harder to sustain.
Meanwhile, demand for many of their services is shrinking—fewer repairs for appliances, watches, and bicycles. With shared bikes everywhere and electronic watches that don’t need fixing, their livelihoods are disappearing. As they reach retirement age, most can only go home to live on a pension of about 300 yuan a month. That’s a serious problem.
I’ve said many times in different forums that these people have made real contributions throughout China’s modernization and urbanization. They deserve higher pensions. It actually wouldn’t cost that much—if we raise their monthly pension from 200 yuan to 1,000 or 1,500 yuan, that’s only about 1 to 1.5 trillion yuan a year in total. That’s roughly twice what we spend annually on building reservoirs—surely affordable.
As the economy grows and fiscal capacity improves, taking proper care of their retirement is a tangible expression of common prosperity. It’s one of the most practical ways to make that ideal real. And once their income and pension increase, they will also spend more. That extra consumption will in turn boost fiscal revenues, because China’s taxes are largely turnover-based. So this part may become a key policy direction in the future 15th Five-Year Plan.
Calls to address pension inequality grow
A retired top financial regulator has lent his support to the growing calls for the Chinese government to significantly increase pension payouts for its farmers. In a high-profile national forum, he advised that Beijing should bridge the gap between the pensions of farmers and urban retirees.