China raises retirement age for first time since 1950

(Patria) - China will gradually raise the retirement age for the first time since the 1950s, authorities announced, implicitly acknowledging that the country faces an aging population and a shrinking pension budget.

The top legislative body yesterday approved a proposal to raise the legal retirement age from 50 to 55 for women engaged in physical work, and from 55 to 58 for women working in offices. The retirement age for men is being raised from 60 to 63.

China's current retirement age is among the lowest in the world. According to the plan adopted yesterday, the change will take effect on January 1, 2025, reports Index.hr.

The corresponding retirement ages will be increased every few months over the next 15 years, Chinese state media reported.

Retirement before the legal age will not be allowed, state news agency Xinhua reported, although people can delay retirement by up to three years.

From 2030, employees will also have to pay more contributions into the social security system in order to qualify for a pension. By 2039, they would need to contribute for 20 years to receive a pension.

The state-run Chinese Academy of Social Sciences said in 2019 that the country's main state pension fund would run out of money by 2035. That was an estimate before the Covid-19 pandemic, which hit China's economy hard.

The plan to raise the retirement age and adjust pension policy was based on a "comprehensive assessment of China's average life expectancy, health conditions, population structure, education levels, and labor supply," Xinhua reported.

However, the announcement sparked skepticism and dissatisfaction on Chinese social media.

"In the next 10 years, there will be another bill to delay retirement until we are 80," one user wrote on Chinese social network Weibo.

"What a miserable year! Middle-aged workers are facing pay cuts and a higher retirement age. Those who are unemployed are finding it increasingly difficult to get a job," another chimed in. Others said they had expected this announcement.

"This was expected, there's not much to discuss. Men in most European countries retire at 65 or 67, while women retire at 60. That will be the trend here too," said one Weibo user.

China's huge population fell for the second consecutive year in 2023, and the birth rate continues to decline. Meanwhile, its average life expectancy has risen to 78.2 years, officials said earlier this year.

According to the World Health Organization, nearly a third of China's population - about 402 million people - will be over 60 by 2040, up from 254 million in 2019.

A slowing economy, cuts in state benefits, and decades of the one-child policy have created a creeping demographic crisis in China.

China's pension funds are drying up, and the country is running out of time to fill the funds enough to care for a growing elderly population.

Over the next decade, about 300 million people, currently aged 50 to 60, will leave China's workforce. This is the largest age group in the country, nearly equal to the population of the United States.