China has decided on Friday to raise the minimum retirement age for its workers at a time of growing economic and demographic pressure in the People’s Republic. The measure, approved on Friday by the permanent committee of the National People’s Congress (the Chinese legislature), will gradually raise the retirement age for men from 60 to 63 years. Women who until now retired at 55 will now do so at 58; those who retired at 50 – mainly workers – will have to wait until 55. Beijing has also decided to raise the minimum contribution period from 15 to 20 years from 2030.
The People’s Republic has been using its propaganda machine all week to support measures that may be unpopular, but which the government considers necessary in a country that is ageing, losing its working population, seeing its pension coffers crack (more than a third of the provinces have registered pension deficits), and which has not touched the retirement system since the 1950s, according to the official Xinhua news agency. The retirement reform will be applied gradually from 2025 and over the next 15 years.
The Minister of Human Resources and Social Security, Wang Xiaoping, said in a statement on Friday that the implementation will be “flexible” and “voluntary” at first, meaning that an employee will be able to choose to retire early or extend their activity for a period of up to three years.
“The increase in the retirement age is based on the longer life expectancy of the population and the extension of the years of schooling, and is a positive measure to address the problem of ageing and the decline in the birth rate,” the minister announced on Wednesday. People’s Daily, one of the propaganda organs, quoting experts.
In China, there are almost 300 million people aged 60 or older, or 21.1% of the country’s total population. There are 216.76 million people over 65. And life expectancy has increased considerably in recent decades, from 67 years in 1980 to 78.6 years today, according to the National Health Commission. Chinese authorities believe that by 2035 the number of people over 60 could increase to 400 million (just for comparison: the European Union has 448 million people).
At the same time, the Asian giant is in a demographic decline. In 2022, it lost population for the first time since the famines of 1961, and fertility rates are at an all-time low. The number of people of working age has fallen since 2012, with an average annual decline of more than 3 million people, according to data provided by Minister Wang. “In the future, the proportion of the working-age population in relation to the total population will continue to decline,” she said. Delaying the legal retirement age can “maintain the momentum and vitality of economic and social development.” The Chinese Academy of Social Sciences has warned that, under current trends, the pension system would run out of money by 2035.
The reform package comes at a time when the Chinese economy, hit by the bursting of a giant property bubble, has entered a phase of slowdown. The years of crazy double-digit growth are long gone, although it remains at rates far above those of most Western countries. In 2023, its GDP grew by 5.2%, and it expects to remain around 5% this year, a figure that some analysts already question. At the same time, Beijing is aware that it faces numerous challenges, including the absence of births, care for the elderly and youth unemployment.
Chinese President Xi Jinping, who is visiting the western province of Gansu, has asked all regions and departments in the country to do a good economic job in the latter part of the third quarter and the fourth quarter. He has urged them to make efforts to “complete the annual goals and tasks of economic and social development,” CCTV reported.
“The measure is an important and well-considered decision, given the current social and economic situation in China and its demographic structure,” he said in the cited article. People’s Daily Pang Shi, director of the Department of Employment and Entrepreneurship at the Chinese Academy of Personnel Sciences, said: “Improving healthcare and increasing life expectancy of the population mean that older people with better health and rich work experience can continue to use their skills to earn income.”
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