We told you last July. China was approaching a crucial decision that would determine its fight against aging and low birthrates in the coming years: What to do about retirement age? The country finally made the decision that was announced and will affect millions of people. The retirement age is increasing for the first time since the 1950s.

Advert. For decades, Chinese workers have ended their working lives at relatively “young” ages: 60 for men and 50 for women. That is about to change since last Friday, when the Chinese government approved new legislation that sets out a plan to postpone retirement age by 15 years, starting on January 1.

Like? Current rules stipulated that men in urban areas could retire and receive their pension at age 60, while women could receive it at age 50 or 55, depending on their profession. The new rules, approved by the highest legislative body, gradually raise the age to 63 for men and 55 and 58 for women, respectively. In addition, the measures include plans to extend the minimum working years, which would increase workers’ monthly pensions from 15 to 20 years, with the changes set to begin in 2030.

Inside the story. The move has been years in the making, as the country continues to suffer from aging and low birth rates. The symptoms of a demographic crisis, along with a slowing economy, have been felt for a long time. Last year, China lost its population for the second year in a row. Meanwhile, across the street, the figures showed the lowest birth rates since records began.

All this means that the retirement age, which is one of the lowest in the world (60 for men, 55 for women in management jobs and 50 for working-class women), is rising. It was 280 million in 2022 and 297 million last year (21% of the total population). Worse still, there are estimates that another 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 suggest that there will be four workers for every retiree in 2030 and only two in 2050.

The “new” retirement. As we said, according to the plan approved on Friday, the change will take effect from January 1, 2025, and the relevant retirement ages will be increased every few months for the next 15 years. State news agency Xinhua reported that retirement before the legal age limit will not be allowed, but people will not be able to postpone their retirement for more than three years.

From 2030, workers will need to contribute more to the social security system to receive their pensions. They will need to save up 20 years of contributions to access their pensions by 2039. The plan includes raising retirement ages and adjusting retirement policy, based on a “comprehensive assessment of life expectancy, health conditions, demographics, education levels and labor supply in China,” Xinhua reported.

Reactions. Since the plan was made official, there has been a sense of discontent and skepticism on the country’s networks. “Another bill will be introduced in the next 10 years to postpone retirement until the age of 80,” wrote one user on the Chinese social network Weibo. “What a terrible year! Middle-aged workers face pay cuts and higher retirement ages. The unemployed are finding it increasingly difficult to find work,” another added.

Some said they had already been waiting for this announcement. “This was expected, there is not much to discuss,” one Weibo user said. “In most European countries, men retire at 65 or 67, while women retire at 60. This will be a trend in our country too.”

It’s a good plan from the government’s perspective. Officials have been clamoring for a measure that they see only as positive, having been met with a more or less lukewarm response on the web. Indeed, Chinese state media have hailed the planned changes as an urgent and necessary reform of an outdated system, highlighting how the current policy has been in place since the 1950s, when life expectancy and education levels were lower.

In this context, demographer Yuan Xin said earlier this week that “the current pension policy framework has remained unchanged for 73 years. The demographic, economic and social landscape has changed greatly, especially since the reform and opening up (which began around 1978).”

Comparison with other countries. The truth is that China’s current retirement ages are lower than those of many other major economies. To give you an idea, the average standard retirement age in 2022 in member countries of the Organisation for Economic Co-operation and Development (OECD) is 63.6 years for women and 64.4 years for men.

The debate over increasing the retirement age Other countries have also had problems managing retirement ages. For example, protests broke out in France in response to the government’s attempt to raise the retirement age from 62 to 64 in 2023. The United States is also discussing pension reform, gradually raising the retirement age with Social Security incentives for retirees to delay taking benefits until age 70. And something similar is happening in Spain.

Fight against aging. Regardless, it’s a gradual increase that’s trying to close, or at least eliminate, a major problem in China, where there are 300 million retirees (and hundreds of millions more are predicted to arrive within a decade). China’s elderly now make up more than 20% of the population, with an estimated 297 million people aged 60 and over at the end of last year, according to a report released earlier this month by the Ministry of Civil Affairs.

Demographers in state media said the elderly population will account for 30% of the total population between 2030 and 2035. That figure is expected to rise to more than 40% of the population by the middle of this century, turning China into a “super-aged society.”

Image | Pixabay, StockSnap

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