China Scrambles for Stability as Its Workers Age

The proportion of people 60 and older is growing faster in China than in any other major country, with the number of retirees set to double between 2005 and 2015, when it is expected to reach 200 million. By midcentury, according to United Nations projections, roughly 430 million people — about a third of the population — will be retirees.
That increase will place enormous demands on the country’s finances and could threaten the underpinnings of the Chinese economy, which has thrived for decades on the cheap labor of hundreds of millions of young, uneducated workers from the countryside. Changes in the country’s population structure are taking place hand in hand with changes in the structure of the Chinese family. China’s one-child policy, which began in 1980, means that, beginning with the current generation of young adults, couples will face the difficult task of caring for four parents through old age.
By the same token, the ratio of workers to retired people will decline from about six to one now to about two to one by 2040.
Obviously, raising the retirement ages would ease a substantial amount of pressure on the pension system. But there are no plans to do so, and raising the retirement ages would present another set of problems for the government, experts here say.
Last year, for example, 4.13 million young Chinese graduated from universities, and fully 30 percent of them are still unemployed. Unemployment is high among those who are not university graduates, as well. Prolonging employment for older workers would make this predicament worse, possibly with volatile consequences.
The bind that China finds itself in takes form in an often-posed question: Can the country grow rich before it grows old? Increasingly, experts here say the answer, which also has huge implications for the global economy, appears doubtful.
Already, experts say the large financing gap resulting from the early retirement of public sector workers has repeatedly caused the state to improvise to keep the system afloat. Receipts from lottery ticket sales and from foreign initial private offerings of stocks, for example, have been drawn upon to finance the system.
Most troubling to financial experts, the government has used payroll taxes paid by the current generation of workers, who in theory are paying into their individual retirement accounts, to pay pensions for the previous generation.
China’s relatively young private life insurance industry is one of the sectors that stands to benefit most from the growing uncertainty over aging and pensions, but even within the industry, analysts express worry.
“If we continue to have sound and healthy development in the economy we might get through this, but what if we cannot?” said Jiang Shihua, a senior official of the Pingan Life Insurance Company, who spoke of a time when China would have 400 to 500 million old people who “only consume and don’t produce at all.”

F.D.A. Rule Limits Role of Advisers Tied to Industry

Expert advisers to the government who receive money from a drug or device maker would be barred for the first time from voting on whether to approve that company’s products under new rules announced Wednesday for the F.D.A.’s powerful advisory committees.
Indeed, such doctors who receive more than $50,000 from a company or a competitor whose product is being discussed would no longer be allowed to serve on the committees, though those who receive less than that amount in the prior year can join a committee and participate in its discussions.
A “significant number” of the agency’s present advisers would be affected by the new policy, said the F.D.A. acting deputy commissioner, Randall W. Lutter, though he would not say how many. The rules are among the first major changes made by Dr. Andrew C. von Eschenbach since he was confirmed as commissioner of food and drugs late last year.
Advisory boards recommend drugs for approval and, in rare cases, removal, and their votes can have enormous influence on drug company fortunes.
“The $50,000 threshold is something that we think strikes an appropriate balance between” getting smart advisers and reassuring the public that their advice is not tainted, Dr. Lutter said.
The changes are intended to respond to a growing chorus of critics who contend that drug and device makers have hijacked the Food and Drug Administration’s approval process by paying those who serve on the agency’s advisory panels.
In one famous example, 10 of the 32 advisers who voted in 2005 to allow the painkiller Bextra to remain on the market and the painkiller Vioxx to return to the market despite safety worries had taken money from the drug makers. Under the new rules, their votes would not have counted and the committee would have voted to keep both drugs off the market.
In the end, the F.D.A. removed Bextra from the market anyway, and Vioxx has never returned. But the controversy surrounding that panel’s vote, and similar ones, tarnished the process and provided new fodder for critics in Congress.
Representative Maurice D. Hinchey, Democrat of New York, said he was delighted with the change, which will not become final until the end of a 60-day comment period.
“So many lives have been lost as a result of the failure of the F.D.A. to review drugs properly,” said Mr. Hinchey, who for two years has proposed legislation to ban agency advisers from having financial conflicts of interest. “The F.D.A. is now moving back to where it was supposed to be, a principled agency that protects the people.”
“F.D.A. is trying to strike a balance here,” Mr. Troy said, “and they would rather strike it themselves than have it struck for them.”
Drug makers routinely hire doctors as consultants for marketing and research. The New York Times reported on Wednesday that records in Minnesota show that at least 20 percent of licensed physicians in the state received money from drug makers between 1997 and 2005 — an average of $10,000.
Some conservatives were not happy with the new rule.
“I think it’s likely to improve the quality of the recommendations, remove the taint of the recommendations and improve the credibility of the recommendations,” Dr. Lurie said.
Advisory panels are important to the F.D.A. not so much because they provide the agency with expert advice — the F.D.A. can get that privately any time — but because they serve to increase public confidence in the agency’s decisions.