Core Viewpoint - The article emphasizes the urgent need to reform China's social security system, particularly the pension scheme, in light of demographic changes, labor market challenges, and the potential for increased productivity through artificial intelligence [5][7][12]. Group 1: Factors Affecting Social Security Sustainability - The three main factors impacting the sustainability of social security are population dynamics, labor market conditions, and labor productivity [5][8]. - Population aging is accelerating, with projections indicating that by 2032, over 21% of China's population will be aged 65 and above, marking a significant demographic shift [8]. - The labor market faces structural employment issues, including high youth unemployment rates and challenges for older workers nearing retirement [9][10]. - Labor productivity has the potential for significant growth, particularly with advancements in artificial intelligence, which could enhance the capacity to support the elderly [11][12]. Group 2: Institutional Arrangements for Sharing Productivity Gains - Current social security arrangements are inadequate for sharing the benefits of increased productivity, necessitating reforms in the pension system [12][16]. - The first pillar of social security is crucial; without a robust first pillar, the second and third pillars cannot function effectively [6][15]. - There is a need to improve the formalization of employment to ensure broader coverage of social security, especially for non-standard employment [13][14]. Group 3: Recommendations for Reform - Establish a universal social security system that includes a living wage and unconditional basic income to address the challenges posed by artificial intelligence [18]. - Reconsider the nominal account system, focusing on a bookkeeping approach that records contributions without requiring them to be fully realized, thus addressing the current paradox in the pay-as-you-go system [19].