China faces the inevitable, raising its low retirement age
Summary
A 1950s policy that lets women retire in their 50s and men at 60 is no longer tenable amid economic gloom and a rapidly aging population
Squeezed by an economic downturn and a rapidly aging population, China took a step toward raising its unusually low benchmarks for when people should retire.
China has one of the lowest retirement ages among major economies, letting women retire as early as 50 and men at 60—policies unchanged since the 1950s. Beijing has long said it wants citizens to work longer, but has repeatedly put off any policy changes for fear of social pushback. The urgency has grown as the country confronts a decline in births and a shrinking workforce.
The National People’s Congress, China’s top legislative body, said Tuesday that it is reviewing a draft law to “gradually delay mandatory retirement ages."
But even as it announced the move, Beijing didn’t unveil any details. Intense state-media coverage about the step indicated the government is testing the waters for how it will be received as unemployment is high among young people and local governments are short of funds for public services, including pension payments.
The government emphasized that the implementation will be gradual.
“Gradual implementation of the policy means that the scale of the labor force released to society in the short term will not be too large, and the overall impact on the job market will be limited," the official Xinhua News Agency cited Yuan Xin, deputy head of the China Population Association, as saying.
Many young Chinese are seeing a higher retirement age as inevitable. Some state-owned companies have held internal briefings about the plan in recent years. Still, a hashtag about the plan gained heated discussions on Chinese social media. A few users said their posts commenting about the announcement have been scrubbed from Weibo, a Chinese microblogging platform.
Leaders have been well aware of the need to delay retirement ages. In its economic blueprint unveiled in 2021, Beijing said it would raise retirement ages in a flexible manner through “small-step adjustments" by the end of 2025.
Like in many countries, including France and Russia, attempts to raise the retirement age have drawn protests. In 2015, Chinese officials promised they would raise the retirement age in small, gradual steps and only after consulting the public. State researchers suggested raising the retirement age by three months every year. Even so, the move elicited strong pushback.
Some analysts said the government could raise retirement ages for women first, bringing them level with that for men. Until now, women in blue-collar jobs in the state sector have retired at 50, while women in other jobs have worked till 55.
The private sector has more flexibility and people can generally work later.
Now, local governments are running low on money just as a wave of retirees hits. China has already cut medical benefits for some retirees. Policy changes in various Chinese provinces and regions have sharply curtailed the amount of money that citizens, especially the elderly, can receive for medical care, prompting public anger and protests.
By 2050, the United Nations projects 31% of Chinese will be 65 or older. By 2100, the share will be 46%, approaching half of the population. In the U.S., the share is expected to be 23% and 28%, respectively.
China’s working-age population, defined by the Chinese government as people between 16 and 59, fell to 865 million last year, or 61% of the total population, official data showed. That was down from 907 million in 2016, or 66% of the total population.
Meanwhile, the average life expectancy in China has almost doubled over the past seven decades, to 78.6 in 2023 from about 40 in the early 1950s, when the current retirement system was introduced.
China is now seeing its version of “baby boomers"—those born after China emerged from devastating starvation in the early 1960s—retiring in droves.
Slowing economic growth, driven by a property downturn and slumps in private investment, adds a sense of urgency.
Even with government subsidies, by 2035 China’s state-led urban pension fund will run out of money accumulated over the previous two decades, leaving it to rely entirely on new workers’ contributions, according to projections made in 2019 by the Chinese Academy of Social Sciences, a government think tank.
The fear now is that there won’t be enough workers to support an aging population. Beijing has touted certain economic benefits from the “silver-hair" economy, such as the needed expansion of nursing homes. However, retirees in China tend to not be major consumers, so sluggish demand and the financial strains of eldercare could further weigh on economic growth.
Write to Liyan Qi at Liyan.qi@wsj.com
