China Raises Retirement Age Starting Next Year

“The retirement age postponement is long-delayed as Beijing was concerned about political backlash,” said Yi Fuxian. “Now the worsening demographic challenges have made pension shortage more prominent. The Chinese government has been left with no choice.”https://t.co/l8hY0cqJ0S

— 易富贤Yi Fuxian《大国空巢》 (@fuxianyi) September 15, 2024

China is raising its retirement age starting next year in an effort to address its shrinking population and aging workforce. The Standing Committee of the National People’s Congress passed the new policy Friday after a sudden announcement earlier in the week that it was reviewing the measure. The policy change will be carried out over 15 years, with the retirement age for men raised to 63 years, and for women to 55 or 58 years depending on their jobs.

The Wall Street Journal published an interview with me on China's postponement of retirement age https://t.co/nwZV5fhPcm Some Beijing critics called the gradual implementation too slow. “This pace is no different from kicking a political time bomb to future generations,” said Yi…

— 易富贤Yi Fuxian《大国空巢》 (@fuxianyi) September 13, 2024

The current retirement age is 60 for men and 50 for women in blue-collar jobs and 55 for women doing white-collar work. “We have more people coming into the retirement age, and so the pension fund is facing high pressure. That’s why I think it’s now time to act seriously,” said Xiujian Peng, a senior research fellow at Victoria University in Australia who studies China’s population and its ties to the economy.

The policy will be implemented starting in January, according to the announcement from China’s legislature. The change will take effect progressively based on people’s birthdates. Demographic pressures made the move long overdue, experts say.

"The retirement age for men will rise from 60 to 63 and for female office workers from 55 to 58 (…) The biggest increase affects female blue-collar workers, who could previously retire aged 50 but will now have to wait until they reach the age of 55." https://t.co/a7ukPhYuul

— Jojje Olsson (@jojjeols) September 13, 2024

By the end of 2023, China counted nearly 300 million people over the age of 60. By 2035, that figure is projected to be 400 million, larger than the population of the U.S.

“To bolster China’s pension system, Beijing moves to raise the retirement age for men to 63 from 60, and for some women to 55 from 50.” https://t.co/96clYoARIG

— Dori Toribio (@DoriToribio) September 13, 2024

Pressure on social benefits such as pensions and social security is hardly a China-specific problem. The U.S. also faces the issue as analysis shows that currently, the Social Security fund won’t be able to pay out full benefits to people by 2033.

China’s aging workforce policy shift

“This is happening everywhere,” said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. “But in China with its large elderly population, the challenge is much larger.”

That is on top of fewer births, as younger people opt out of having 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 shrank further, by 2 million people. The necessary course correction will cause short-term pain, experts say, coming at a time of already high youth unemployment and a soft economy.

A 52-year-old Beijing resident, who gave his family name as Lu and will now retire at age 61 instead of 60, was positive about the change. “I view this as a good thing, because our society’s getting older, and in developed countries, the retirement age is higher,” he said. Li Bin, 35, who works in the event planning industry, said she was a bit sad.

“It’s three years less of play time. I had originally planned to travel around after retirement,” she said. But she said it was better than expected because the retirement age was only raised three years for women in white-collar jobs.

Some comments on social media when the policy review was announced earlier in the week reflected anxiety. But of the 13,000 comments on the Xinhua news post announcing the news, only a few dozen were visible, suggesting that many others had been censored.