China sets up first national lottery to help pay for millions of pensions

Punters across China will raise money for the swelling ranks of senior citizens by taking part in the country's first nationwide lottery this week. From 1 September, people who purchase a 2-yuan ticket have the chance of becoming an instant yuan millionaire (£80,000), in a country where the average annual income is just £500.

Punters across China will raise money for the swelling ranks of senior citizens by taking part in the country's first nationwide lottery this week. From 1 September, people who purchase a 2-yuan ticket have the chance of becoming an instant yuan millionaire (£80,000), in a country where the average annual income is just £500.

Organisers expect strong interest in the weekly draw, in which, besides the million-yuan jackpot, there will be smaller prizes for almost one in five ticket-holders. It is hoped that between £40m and £80m worth of tickets will be sold during a four-month trial period ending on 31 December.

Forty seven per cent of the revenue is destined for funds providing public-health services for the elderly and other welfare services.

For 50 years the Communist Party had maintained a strict ban on gambling, traditionally popular in China. But while there are continued mutterings about the morality even of prize draws, in recent years the government has sanctioned local lotteries in Peking and other cities that support "good causes". In this case, the good cause has been chosen because of the enormous financial burden of the elderly on state and family.

This year China became an "ageing society" by United Nations standards. About 130 million people, or 10 per cent of the population, are over 60, and make up the fastest growing group of elderly people in the world. By 2040, one-quarter of Chima's population will be senior citizens. But the funding and infrastructure to provide social security are lacking, particularly on such a vast scale.

Welfare for the elderly is under threat as state-owned enterprises, thrust into an unforgiving marketplace, find themselves unable to pay those who have retired. The pension system is under constant reform, while many funds have been misappropriated. A controversial social security tax being drafted could go some way to helping.

The crisis has its roots in the baby boom of the Fifties and Sixties, when Chairman Mao exhorted "hero mothers" to produce more hands to build a stronger nation. In the Seventies it was realised that China would never grow rich with so many mouths to feed, which led to the implementation of the one-child policy. Although sometimes brutally enforced,the policy has reduced the birth and population-growth rates. However, the average life expectancy has leapt from 35 years in 1949 to 70 today.

While the country cannot afford a Western-style "welfare state", it also cannot now rely on children supporting their elderly parents. More and more are choosing to send their parents to homes, partly a result of family size - there are rising numbers of "4-2-1 families" where an only child ends up supporting two parents and four grandparents.

China has a very limited number of state-owned old people's homes. Peking, for example, houses fewer than 1 per cent of its residents over 60, compared with the minimum 3 per cent standard in the West.

The Ministry of Civil Affairs has made a number of unsuccessful pleas to its citizens to invest in the elderly. Through the lottery, the government is hoping to appeal to the public's baser instincts.

Li Wei, the founder of Pine Tree Hall, China's first hospice, cautiously welcomed the new initiative. "It shows the elderly issue is becoming more prominent than before," he said. "Some of the money may reach state-run institutions, but not private ones like mine. Ordinary elderly people will not benefit."

But some will. And despite the government ban on gambling, the number of illegal lotteries being raided by the police shows that the Chinese still love a risk. Among the more ingenious ways around the ban is the practice at a racetrack outside Peking. No "bets" can be placed, but punters are permitted an "intelligence test" to guess which horse will win.