China will “gradually raise” the retirement age for the first time since the 1950s as the country faces an ageing population and a shrinking pension budget.
The country’s top legislative body on Friday approved proposals to raise the statutory retirement age for women in manual occupations from 50 to 55 and for women in manual occupations from 55 to 58.
For men, there will be an increase from 60 to 63.
The current retirement age in China is among the lowest in the world.
Under the plan approved on Friday, the change will take effect from January 1, 2025, with the respective retirement ages increasing every few months over the next 15 years. said Chinese state media.
Retirement before reaching the legal age will not be allowed, reported the state news agency Xinhua. However, retirement can be delayed for a maximum of three years.
From 2030, employees will also have to pay more social security contributions to receive a pension. By 2039, they would have to prove 20 years of contributions to qualify for the pension.
The state-run Chinese Academy of Social Sciences said in 2019 that the country’s main government pension fund would run out of money by 2035 – and that was an estimate before the Covid-19 pandemic hit China’s economy hard.
The plan to raise the retirement age and adjust pension policies is based on “a comprehensive assessment of China’s average life expectancy, health status, population structure, education level and labor supply,” Xinhua reported.
However, the announcement has been met with skepticism and resentment on the Chinese Internet.
“In the next decade, there will be another law delaying retirement until we are 80,” wrote one user on Chinese social media site Weibo.
“What a miserable year! Middle-aged workers are having to deal with pay cuts and an increase in the retirement age. It is becoming increasingly difficult for the unemployed to find a job,” another commented.
Others said they had expected the announcement.
“That was to be expected, there is not much to discuss.
“In most European countries, men retire at 65 or 67, women at 60. This trend will continue in our country,” said a Weibo user.
China’s huge population shrank for the second consecutive year in 2023 as the birth rate continued to decline.
The average life expectancy is now increased to 78.2 yearsofficials said earlier this year. According to the World Health Organization, by 2040, nearly a third of China’s population – about 402 million people – will be over 60 years old, up from 254 million in 2019.
A weakening economy, shrinking government benefits and a decades-long one-child policy have triggered a creeping demographic crisis in China, wrote our China correspondent Laura Bicker earlier this year.
China’s pension pot is running out and the country is running out of time to build a fund large enough to care for its growing elderly population.
Over the next decade, about 300 million people between the ages of 50 and 60 will leave the labor force in China. This is the largest age group in the country and almost the size of the U.S. population.
So who takes care of them? The answer depends on where you go and who you ask.
Read our analysis here
