China Considers Raising Retirement Age to Combat Aging Population

China's top legislative body is assessing a plan to raise the retirement age to address economic pressures from a shrinking workforce. With an aging population and increasing life expectancy, the reform aims to ease pension budget deficits. Public feedback will be sought on draft law changes.

China's top legislative body this week assessed an official plan to delay the country's retirement age, currently one of the world's lowest, marking a key step towards revising long-standing labor laws and alleviating economic pressures from a decreasing workforce.

The ruling Communist Party announced in July that the retirement age would be progressively increased. Presently, it stands at 60 for men, 55 for women in white-collar jobs, and 50 for women in blue-collar roles.

Extending work years would relieve pension budget strains, with several Chinese provinces already experiencing significant deficits. However, this move might not be welcomed by all, as it would postpone pension payouts and keep older employees in their jobs longer.

The subject became a trending topic on Chinese social media after the official Xinhua news agency reported discussions by top National People Congress members in Beijing, where concerns about more job seekers pursuing limited openings were voiced.

Mo Rong, Director of the Chinese Academy of Labour and Social Sciences, remarked to the People's Daily, "It is an inevitable choice for China to adapt to the new normal of population development." He highlighted the urgency of reform with China's life expectancy rising from about 44 years in 1960 to 78 years as of 2021 and projected to exceed 80 years by 2050.

Health authorities predict that the 60-plus age group will swell from 280 million to over 400 million by 2035, equivalent to the combined populations of Britain and the United States. Currently, each retiree is supported by five workers, a ratio expected to shift to 4-to-1 by 2030 and 2-to-1 by 2050.

Finance ministry data shows that 11 of China's 31 provincial-level jurisdictions are grappling with pension budget deficits. The Chinese Academy of Sciences warns that the pension system could be depleted by 2035. JOB CONCERNS

Draft law changes to amend the retirement age are anticipated to be released for public feedback soon. More than 100,000 comments were made on social media platform Weibo in response to Xinhua's post, with many expressing worries about rising unemployment among young people and the elderly needing to work longer.

"Young people cannot find jobs, middle-aged people are worried about layoffs, and now there's another issue: the elderly can't retire," one Weibo user said. Stuart Gietel-Basten, a professor at Hong Kong's University of Science and Technology, noted that it's improbable the reform would see both young and elderly workers competing for the same positions.

"Older workers will likely retain blue-collar and white-collar jobs distinct from entry-level roles," Gietel-Basten explained. In countries like Japan and South Korea, pensions are accessible at 65 and 63 years, respectively, partly due to longer life expectancies.

Nevertheless, adjusting the pension age in China could be more challenging due to disparities among provinces and between urban and rural areas. "While life expectancy suggests an increase is necessary, fairness is crucial, especially for migrant or gig workers who may not have consistent years of paid employment," Gietel-Basten added.

(With inputs from agencies.)