China set to raise retirement age as demographic crisis looms
Government media outlets have been already preparing the population for these changes prior to their legalization.
China is allowing its statutory retirement age to increase over time because the country is grappling with a demographic crisis and a rapidly aging population, as reported by AFP on Friday. Given that in the following decades hundreds of millions of people will become elderly and the birth rate is low, this shift has proven to dampen the effects on the economy, health care, and social services.
Policymakers have sounded the alarm after the country’s population fell for the second year in a row in 2023. Today’s retirement age, which has been left unchanged for decades, is among the lowest across the world.
The decision made by the state-controlled Xinhua News Agency reported and AFP confirmed that the increase in the retirement age for male employees will be from 60 to 63 years. Women will experience a gradual progression depending on the nature of employment and will raise retirement ages from 50-55 years to 55-58 years for women. The transition will happen incrementally over a period of 15 years beginning in 2025.
Xinhua also mentioned that starting from the year 2030, the minimum years of pension contributions to be eligible for monthly benefits would be raised from 15 to 20 years for each 6 months. Further, new rules will let workers delay retirement even more in case they wish to and if this is acceptable to their employers.
These include longevity, health, education, and workforce, state media said the Bretton Woods institution used to make this decision. Speaking to The Wall Street Journal in an interview, labor economist Li Changan has said that demographic change might have prompted the change.
Changan stated, “The central government first proposed changing the retirement age in 2013, and there has been a lot of social discussion in the decade since. I think many people are mentally prepared for the announcement.”
Government media outlets have been already preparing the population for these changes prior to their legalization. An article in the People’s Daily indicated that the reform would complement the enrollment increase due to the increase in life expectancy and education level as a way of improving human resource development efficiency. Mo Rong, director of the Chinese Academy of Labour and Social Security, said this decision is ‘inevitable’ given the fact that China is in the process of transforming its population age structure.
This announcement generated a great response on the social media platform, particularly on Weibo, where it received over 200 million hits. Some users responded to the news appreciatively, while others raised some concerns, especially on the implications of the reform for young people. Some of the posts, though, were edited; this is usually a common practice in China, especially when it comes to the national policies.
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