> China has announced plans to raise the retirement age for the first time since 1978, as the world’s second-largest economy faces up to a sharply aging population that will leave it short of workers. The country will gradually extend the retirement age for all men from 60 years old to 63, for women in white-collar jobs from 55 to 58 and for women in blue-collar work from 50 to 55, state-owned news agency Xinhua reported on Friday. The changes will take effect in January and be phased in over 15 years in line with the principle of “small-step adjustments”, Xinhua said.
> China’s policymakers have grappled for years with the issue of raising its retirement thresholds, which are among the lowest in the world, as the country faces an imbalance between its working-age population and pensioners as a result of its low birth rate and ageing population. The measures, which were approved by the standing committee of China’s rubber-stamp parliament on Friday and were previewed at a five-yearly Communist party policy meeting in July, come as households are under pressure from slowing economic growth, a prolonged property sector slump and a weak job market. The move has also sparked indignation among younger people, who complain that they are working ever-longer hours to support an aging extended family. Many of China’s youth are also only children, due to the now defunct “one-child policy”, which limited the country’s birth rate for decades before it was eased in 2016.
> China also needs to keep its population in the workforce for longer in order to ease pressure on its underfunded pension systems, analysts said. Under the changes announced on Friday, the retirement age for men and white-collar women will be extended by one month for every four months worked until they reach the new ceiling. For blue-collar women, the retirement age will be extended by two months for every one month worked. The pension contribution period will also be lengthened. Starting in January 2030, the minimum contribution period to receive the basic monthly pension payment will gradually rise from 15 years to 20 years, with an increase of six months each year. Those who have already reached the minimum contribution period can opt for early retirement within certain limits. Those who reach the retirement age can also apply to keep working for up to three years.
> Analysts said China needed to act because its low retirement age and declining birth rate were driving an increasing old-age dependency ratio — the number of retirees to the working-age population. China’s population declined for a second consecutive year in 2023, to 1.4bn, as deaths outstripped births by 2mn. Using a broader definition of the working age than that set by China’s current retirement ages, the Center for Strategic and International Studies estimated that China’s old-age dependency ratio was 21 per cent last year, against 27 per cent for the US. The think-tank used a broader definition than that set by the current retirement age, comparing people aged 65 and older with those aged 15 to 64. This figure is set to rise to 52 per cent by 2050 — compared with 39 per cent for the US — and hit 83 per cent by 2100, when the US ratio will be 55 per cent, according to CSIS.
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> China has announced plans to raise the retirement age for the first time since 1978, as the world’s second-largest economy faces up to a sharply aging population that will leave it short of workers. The country will gradually extend the retirement age for all men from 60 years old to 63, for women in white-collar jobs from 55 to 58 and for women in blue-collar work from 50 to 55, state-owned news agency Xinhua reported on Friday. The changes will take effect in January and be phased in over 15 years in line with the principle of “small-step adjustments”, Xinhua said.
> China’s policymakers have grappled for years with the issue of raising its retirement thresholds, which are among the lowest in the world, as the country faces an imbalance between its working-age population and pensioners as a result of its low birth rate and ageing population. The measures, which were approved by the standing committee of China’s rubber-stamp parliament on Friday and were previewed at a five-yearly Communist party policy meeting in July, come as households are under pressure from slowing economic growth, a prolonged property sector slump and a weak job market. The move has also sparked indignation among younger people, who complain that they are working ever-longer hours to support an aging extended family. Many of China’s youth are also only children, due to the now defunct “one-child policy”, which limited the country’s birth rate for decades before it was eased in 2016.
> China also needs to keep its population in the workforce for longer in order to ease pressure on its underfunded pension systems, analysts said. Under the changes announced on Friday, the retirement age for men and white-collar women will be extended by one month for every four months worked until they reach the new ceiling. For blue-collar women, the retirement age will be extended by two months for every one month worked. The pension contribution period will also be lengthened. Starting in January 2030, the minimum contribution period to receive the basic monthly pension payment will gradually rise from 15 years to 20 years, with an increase of six months each year. Those who have already reached the minimum contribution period can opt for early retirement within certain limits. Those who reach the retirement age can also apply to keep working for up to three years.
> Analysts said China needed to act because its low retirement age and declining birth rate were driving an increasing old-age dependency ratio — the number of retirees to the working-age population. China’s population declined for a second consecutive year in 2023, to 1.4bn, as deaths outstripped births by 2mn. Using a broader definition of the working age than that set by China’s current retirement ages, the Center for Strategic and International Studies estimated that China’s old-age dependency ratio was 21 per cent last year, against 27 per cent for the US. The think-tank used a broader definition than that set by the current retirement age, comparing people aged 65 and older with those aged 15 to 64. This figure is set to rise to 52 per cent by 2050 — compared with 39 per cent for the US — and hit 83 per cent by 2100, when the US ratio will be 55 per cent, according to CSIS.