In the context of rapid economic and demographic change, the People’s Republic of
China has attempted to reshape its public pension system. Although China’s current pension
system has drawn the attention of many policy analysts, no theoretically informed account
on the politics of Chinese pension reform has yet been published. Grounded in a broad
institutionalist perspective, this contribution analyses contemporary pension politics in China
through the interplay of four main factors: (1) decentralisation and limited administrative
capacity, which make it difficult to rationalise and transform the existing pension system;
(2) feedback effects from previously enacted pension schemes that further complicate policy
change; (3) liberalisation and economic reforms, which have created ‘vested interests’ in the
newly established private sector, but which have lacked the strength to generate a mature
financial system; (4) finally, the apparent dominance of the neo-liberal financial paradigm
commonly associated with the World Bank. While this financial paradigm favours the adoption
of new reform proposals, the economic and institutional factors mentioned above complicate
their implementation.