China considers a sharp increase in the retirement age

According to some reports, they will retire at the age of 70-75

In China, again thinking about raising the retirement age in connection with the rapidly aging population of the country. The country’s new prime minister, Li Qiang, said on Monday that the government would be prudent in pursuing this policy. Experts expressed support for the proposed reforms.

China plans to raise the retirement age gradually and in stages to cope with the country’s rapidly aging population, the Global Times reported on Tuesday, citing a senior expert at China’s Ministry of Human Resources.

President of the Chinese Academy of Labor and Social Sciences Jin Weigang noted that the People’s Republic of China is committed to a “progressive, flexible and differentiated way to raise the retirement age”: “For people approaching retirement age, it is enough to postpone retirement for a few months.” A senior government adviser warned that young people will have to work for several years longer, but they will have a long adaptation and transition period in store.

“The most important feature of the reform is to allow people to choose when to retire based on their circumstances and conditions,” Jin Weigang added.

Officially, China has not yet announced a change in the retirement age, which is one of the lowest in the world. Currently, according to Spiegel magazine, it is 60 years for men, 55 years for women and 50 years for women working in high-impact enterprises.

The country’s new prime minister, Li Qiang, said on Monday that the government will conduct rigorous research and analysis in order to prudently pursue policy in discourse.

China, with a population of 1.4 billion, is the most populous country in the world. However, the one-child policy from 1980 to 2015 results in too few children entering the labor market. This increases the pressure on the pension fund. The National Health Commission predicts that the number of people over 60 will increase from 280 million to more than 400 million by 2035 – that’s the entire current population of the UK and the US combined.

At the same time, life expectancy has increased dramatically in recent decades due to the economic growth of the state. According to Spiegel, if in 1960 this indicator was 44 years, then in 2021 it is closer to the indicator of 78 years (a higher value than in the same United States). According to studies, by 2050 it is likely to exceed the 80-year milestone altogether.

Currently, each pensioner is supported by the contributions of five employees. This ratio is half what it was ten years ago. According to experts, by 2030 it may drop to 4:1, and by 2050 – to 2:1. According to demographers and economists, the current pension system is no longer sustainable, relying on a shrinking workforce to support a growing number of retirees. According to the Ministry of Finance, 11 out of 31 provinces in China have a deficit in pension budgets. The National Academy of Sciences of China suggests that by 2035 the pension system will run out of money.

In general, the conversation about raising the retirement age in China has been going on for a long time and, in principle, is not a surprise for citizens. As early as 2021, State Council Premier Li Keqiang warned that the reform would be carried out as part of the country’s 14th Five-Year Socio-Economic Development Plan from 2021 to 2025: “The standard retirement age will be raised in stages, with the provision of basic old-age pension insurance up to 95% population”. Lee then added that the authorities also intend to work to achieve the desired birth rate and improve the social security system.

The retirement age in the country has not changed for more than 40 years. It is not yet clear how much the current figure will rise, but in 2020, for example, the PRC government announced that it was considering raising the retirement age to 70-75 years.

According to Reuters, China is facing a so-called demographic time bomb. This was partly due to an increase in the elderly population, partly due to the one-child policy that lasted for about four decades until it was finally abolished in 2016.