However, Lu believes such arguments don't hold water.

"The Chinese Government has the financial capacity to provide subsistence for the rural elderly, while the real bottleneck is a change in attitude--whether the government has the determination to do it," said Lu.

Tao Liqun, a senior researcher with the China Research Center on Aging, expressed his anxiety about the lack of subsistence allowances for the rural poor. "This problem must be put on the government's agenda immediately or the situation will only get worse as time goes by," he told Beijing Review.

Exploring solutions

As a matter of fact, at the same time that the government launched the urban pension insurance scheme, some rural areas, especially well-off areas, started to tentatively establish a rural pension insurance system. The government acquiesced in such efforts but refused to provide any subsidies--as is the case with the urban pension system--or policy support.

According to Lu, the pension systems set up in many rural areas are mostly symbolic. She gave an example. One region asked every farmer to pay a monthly premium of 2 yuan to 20 yuan. As most of the local farmers thought the prospects for the pension system were dim, they chose to pay 2 yuan. The result is they can only get a monthly payment of 9 yuan after they are 60 years old, which is the price of a packet of cigarettes.

Meanwhile, the experimentation with pension insurance in different areas could not deepen without clear government policies and regulations. The mismanagement of the insurance fund had led to rampant graft and embezzlement. In the late 1990s, the government began to investigate and crack down on fraud in the pension insurance systems of rural areas, which effectively put an end to the development of such schemes.

The Chinese Government formally encouraged the establishment of pilot projects for rural pension funds in 2004. In some places, local governments injected money into these funds, and there have been some modest successes.

"Being a vegetable farmer for decades, I never expected to get a retirement pension in my wildest dreams," said Ma Julan from Hami City in Xinjiang Uygur Autonomous Region.

She is one of seven beneficiaries of her village's pension fund, which was started by the president of a local real estate development company, Cui Yong, in May 2006.

Ma's village is located in the suburbs of Hami City. Since the beginning of the 1990s, the expansion of the city has taken away two thirds of the village's farmland. Although the government pays farmers compensation for land expropriation, earning a livelihood remains a concern for farmers who lost their land.

Cui's real estate development company was founded on the business of developing the village's land. The 108 shareholders of the company, including Cui himself, are all farmers in this village. To return part of the profits to the villagers, Cui created a pension foundation and promised to donate 5 percent of the company's annual profits to the foundation. Moreover, Cui also turned over the permanent operating rights of some commercial real estate to the foundation.