We said it a few months ago. We are not giving up on finding a formula that will ease people’s retirement and retirement situations in Europe. But nothing is happening on the continent like what is happening in China and its 300 million retirees (and hundreds more planned to happen in ten years). The country has taken a decision to solve the problem: gradually raise the retirement age.

Gradual increase. The news was an open secret. China plans to gradually raise the legal retirement age over the next five years to cope with an aging population and an increasingly overwhelmed pension system. It’s part of a series of decisions adopted at the Communist Party’s five-year high-level meeting, known as the Third Plenum.

Before giving context to the serious crisis in the Asian country, a revealing fact: life expectancy has now exceeded that of the United States, rising to 78 years, compared to just 36 years during the communist revolution in 1949.

A crisis on many fronts. The country has a problem: an aging society. The symptoms of a demographic crisis, along with a slowing economy, have been felt for some time. Last year, China lost its population for the second year in a row. Meanwhile, across the street, the figures showed the lowest birthrate since records began.

All this means that the retirement-age population, which is among the lowest in the world (60 for men, 55 for women in management jobs and 50 for working-class women), is growing steadily. It was expected to be 280 million in 2022 and 297 million last year (21% of the total census).

Worse still, there are estimates that say an additional 300 million people will be added in the next decade, and by mid-century the population aged 60 and over will exceed at least 500 million (almost 40% of the total population). In fact, estimates say there will be four workers for every retiree in 2030, and only two workers in 2050.

Gradual phased retirement. The entire scenario we described above leads us to a confirmed report that has been in the works for months. “In accordance with the principles of voluntariness and flexibility, we will steadily and orderly advance the reform of gradually delaying the legal retirement age,” the Chinese Communist Party said in a statement last Sunday.

The plan, along with several other key reforms, was released in a decree three days after the country’s leaders wrapped up the third China general assembly, a major political gathering held every five years in Beijing.

What do we know? The truth is that it has not been specified how much or when the retirement age will be increased, although the China Retirement Development Report released at the end of 2023 detailed that “the final result after adjustment may be 65.” The plan has been in place for several years as China’s retirement budget shrinks.

For any clue, in 2019 (and before the pandemic), the cabinet predicted that China’s state pension fund would run out by 2035 due to a shrinking workforce. Years of strict restrictions imposed due to the pandemic have further squeezed local governments’ coffers and could, as they explained, “further exacerbate the pension gap.” At the same time, as we’ve said, the country’s enormous population is set to shrink for the second consecutive year in 2023, with the birth rate falling.

In these somewhat “vague” terms, especially when dealing with capital issues such as retirement, the state-run Global Times reported that demographers in the country said that the plan to raise the retirement age emphasizes “voluntariness” and “flexibility.” It is impossible to predict how far this apparent decision by the Chinese citizen will go, but it seems clear that the authorities are recognizing that there is no one-size-fits-all policy on retirement.

Skepticism. This is the word that currently describes the plan of many Chinese Internet users. Among all the doubts expressed, there is one doubt that recurs. “Those who want to retire early are tired of their laborious work, but those in comfortable and lucrative roles will not choose to retire. What kind of work will the younger generation encounter?” is one of the important issues that no one has yet explained, a user on Weibo commented.

Image | Soctech, Clay Banks (Unsplash)

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