SHENYANG VILLAGE, China, Mar 2 Xie Huilan, 66, has worked all of her adult life and has n

SHENYANG VILLAGE, China, Mar 2 (Reuters) Xie Huilan, 66, has worked all of her adult life and has never given a thought to retirement.

Indeed, she and her 73-year-old husband work harder than ever, farming their plot of land in China's northwestern province of Shaanxi and caring for their grandchildren, whose parents are migrant workers in the cities.

''Of course I'm tired, but there is nothing I can do,'' said Xie, sitting inside her small courtyard home in this poor, drought-prone region of Shaanxi.

China is already home to more than half the old people in Asia and by 2050 its elderly are expected to exceed 400 million. Long before that point, analysts say, the burden of the elderly will far outweigh the benefits of having fewer children under China's strict family planning rules.

''The demographics are deteriorating very rapidly and I don't think anything can stop that now,'' said Stuart Leckie, a pensions expert and chairman of Hong Kong-based consultancy Stirling Finance Ltd.

BASIC COVERAGE As China faces the crisis of a rapidly ageing population, the government is finally talking about addressing the burden facing its elderly.

Expanding pension coverage and reforming underfunded and mismanaged social security systems are likely to be key topics at its annual parliament session to open on March 5.

''Society hasn't paid enough attention to the seriousness of the problem,'' Vice Premier Hui Liangyu was quoted as saying of the country's ageing population.

He urged China to ''actively explore the establishment of a rural pension system and comprehensively establish a rural subsistence security system,'' according to the People's Daily, the official newspaper of the ruling Communist Party.

The state-run China Daily has also reported the government will unveil a regulation on basic social security coverage following the parliament session, but gave no details on what it would look like or how it would be funded.

The country is also grappling with the political consequences of a scandal in Shanghai, where top officials stand accused of draining money from the city's 10 billion yuan ($1.29 billion) social security fund for illicit loans and investments.

In the meantime, China's millions of ageing villagers do back-breaking labour well into old age, their burden compounded by the absence of working-age men in the area, most of whom have migrated to cities to seek work.

Xian Fanglan, 60, was not even familiar with the concept of social security.

Her husband, son and daughter-in-law all work as migrant labourers, leaving her to till the fields of apples, wheat and corn common to this part of Shaanxi.

''We have to make a living -- there is no other way,'' she said, squatting in her courtyard and removing dried corn from stalks to be milled.

In Shenyang village it is common to see old men hunched over wheelbarrows stacked high with apples and loading heavy sacks on to trucks bound for the local juice plant.

But analysts say despite the talk of doing more to re-establish social welfare systems that have disintegrated along with China's planned economy, the rural elderly are unlikely to become a government priority.

CITIES FIRST Instead, China will likely move to reform its piecemeal urban pension system first.

''It's from the very fundamental point of view that the workers need a pension whereas the farmers have got their land,'' said Leckie.

In 30 years, he predicts, there will likely still be little in the countryside beyond perhaps a subsistence allowance that would be enough to keep a person fed, but hardly adequate as a nest egg to retire on.

The country has experimented with farmers' savings schemes for rural areas, but participation is declining despite the growing population of elderly.

''The people who need this the most are the ones who can ill-afford to set aside 20 or 30 yuan a month,'' said Leckie.

Traditionally in China, old people were looked after by their children.

But with millions of working-age rural residents migrating to cities to earn a living, the inverse is happening, with old people increasingly caring for their grandchildren.

In addition to farm labour, Xie and her husband look after their two grandchildren, a six-year-old boy and 11-year-old girl.

Her son would like to do more to alleviate their burden, but last year his boss absconded with wages that were never recovered, and money is tight.

''My husband is also old. Our abilities always fall short of our wishes,'' she sighs.

As she speaks, her grandson bounds into the courtyard fresh from school, a red knapsack on his back, and stops short at the sight of foreigners.

Xie ruffles his hair and tweaks his ear affectionately, but she says she has also told her son that looking after the children has become too much, and that soon he'll have to find another means of caring for them.

''The kids are still little,'' she says. ''Each evening when they come home I want to help them, but often I just can't -- I'm too old and I'm tired.'' REUTERS SHB RAI1017