Drivers drive during morning rush hour in Beijing on Friday.
Andy Wong/AP
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Andy Wong/AP
BEIJING — Starting next year, China will raise its retirement age, which is currently one of the youngest among major economies in the world, to address its shrinking population and aging workforce.
The Standing Committee of the National People’s Congress, the country’s legislature, approved the new policy on Friday after a sudden announcement earlier in the week that it was considering the measure, state broadcaster CCTV reported.
The policy change will be implemented over 15 years, with the retirement age for men raised to 63 and for women to 55 or 58 depending on their job. The current retirement age is 60 for men and 50 for women in manual jobs and 55 for women in intellectual jobs.
“We have more people entering retirement age, so the pension fund is (facing) huge pressure. That’s why I think it’s time to take serious action,” said Xiujian Peng, a senior research fellow at Victoria University in Australia who studies China’s population and its connection to the economy.
Mr Peng said the previous retirement age was set in the 1950s, when the average life expectancy was only around 40 years old.
The policy will be implemented starting in January, according to a notice from China’s legislature. The change will take effect gradually based on people’s birth dates.
For example, a man born in January 1971 could retire at age 61 years and 7 months in August 2032, according to a chart published with the policy. A man born in May 1971 could retire at age 61 years and 8 months in January 2033.
Experts say demographic pressures have made the move too late. By the end of 2023, China counted nearly 300 million people over the age of 60. By 2035, that number is expected to reach 400 million, larger than the population of the United States. The Chinese Academy of Social Sciences had previously predicted that the public pension fund would run out of money by that year.
Pressure on social benefits like pensions and social security is hardly a problem unique to China. The United States faces the same problem, with analysis showing that the current Social Security fund will not be able to cover everyone’s full benefits by 2033.
“This is happening everywhere,” said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations. “But in China, where there is a large aging population, the challenge is much greater.”
This is compounded by fewer births as young people choose not to have children, citing high costs. In 2022, China’s National Bureau of Statistics reported that for the first time, the country had 850,000 fewer people at the end of the year than the previous year, a turning point from population growth to decline. In 2023, the population fell by another 2 million.
That means the burden of funding pensions for the elderly will be shared among a smaller group of younger workers, since pensions are largely funded by deductions from those currently working.
Researchers measure that pressure by looking at a figure called the dependency ratio, which counts the number of people over 65 compared to the number of workers under 65. According to government statistics, that number was 21.8 percent in 2022, meaning about five workers will support one retiree. That percentage is expected to increase, meaning fewer workers will have to shoulder the burden of a retiree.
Experts say the necessary course correction will have short-term consequences, coming at a time when youth unemployment is already high and the economy is stagnant.
A 52-year-old Beijing resident who gave his surname as Lu and will now retire at 61 instead of 60 was positive about the change. “I see it as a good thing, because our society is aging, and in developed countries the retirement age is higher,” he said.
Li Bin, 35, who works in the events industry, said she felt a little sad.
“The playing time is less than three years. I had originally planned to travel after retirement,” she said. But she said it was better than expected because the retirement age was only increased by three years for women in office jobs.
Some comments on social media when the policy review was released earlier this week reflected concern.
But of the 13,000 comments on Xinhua’s post announcing the news, only a few dozen were displayed, suggesting that many others were censored.
