"Market competition in China is expected to intensify with the introduction of the personal pension scheme as wealth management firms, insurers and mutual funds will strive to provide more products," said Wang Hongying, head of the Institute of Financial Derivatives of China.

"The participation of institutions will make the investment under the personal pension accounts more diversified and stable. And only in this way can personal pension see its value significantly appreciate," he said.

As for the feared labor shortage, Yuan of Perseverance Asset Management said China still has room to stimulate the overall potential in the labor force. First of all, the surplus labor in the agricultural sector can be transferred to the nonagricultural sector. The participation rate of the senior group aged between 50 and 65 in the labor force can also be further elevated, he suggested.

More importantly, the education level of the labor force in China should be further improved, said Yuan. "The major drivers of long-term economic growth are the optimized allocation of various resources and the improved production efficiency. China's labor potential will mainly come from the improvement in labor quality and the more effective allocation of labor resources among industries. In other words, quality-based labor potential, rather than the demographic dividend derived from sheer quantity, will be more important."