Businesses in China have to dig deeper to help pick up the nation's pension bill.

Live from the UK, this is the Marketplace Morning Report from the BBC World Service.

Hello, I'm Nick Laethe.

First to China and the move forcing employers to contribute to workers' pensions.

Up to now, bosses and employees have frequently bypassed the regulations in return for higher wages,

but from this week they are being enforced.

The move aims to secure retirements, but small businesses are feeling the pinch.

Han Lin, China Director at the Asia Group, joins me on Marketplace.

Hi, Han.

Hi, how are you?

All very good here, thank you.

So what has changed this week?

So really the idea of tightening this pension was to try to close the gap between China's rapid economic growth and a really much weaker social safety net. But there's a big irony because even though

the policy is meant to protect workers, the tradeoff is

it may actually push more of them into the informal economy because so many businesses can't afford

to pay it. What a business is finding so hard then? Despite what looks like a strong economy,

a lot of the small businesses are struggling with cash flow because oftentimes

their clients are delaying the amount of time they take to pay these businesses. If they're

short on cash, it's harder to pay people their wages and certainly much more difficult to pay

their pension benefits as well. Well, they've been getting away with it essentially up till now, haven't they?

Absolutely, because there have often been informal agreements between the business and the employee

that maybe these pension payments can be waived. But essentially, what the government has said

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