How private transfers respond to parental income in urban and rural China? Evidence from national surveys

China is entering a new historical era that has as its demographic hallmark an ageing population. The emerging pattern of support for older people indicates the pursuit of a new balance between formal and informal support. Through the use of a variety of quantitative methodologies and nationally representative dataset, this study aims to provide robust estimates of how the increase in public programmes is influencing private transfers in China. The analysis of the factors that determine the incidence of receipt of transfers from children suggests that inter-generational transfers in China tend to target old parents that are in greater financial need. Moreover, the analysis of determinants of the size of transfer suggests that although altruism and exchange motives co-exist, the exchange motive dominates inter-generational transfers in urban China. This study argues that a gradual increase in public transfers will not crowd out private transfers, and, in cities, may actually strengthen private transfers.