For decades, Chinese workers have been retiring relatively early. That is now set to change

Hong Kong
CNN
—

For decades, Chinese workers have been ending their working lives at a relatively young age: men at 60 and women as early as 50.

But that is about to change: The Chinese government passed a new law on Friday that will raise the retirement age over a period of 15 years starting January 1, the state news agency Xinhua reported.

Under existing rules, men in urban areas could retire and receive their pension at age 60, while women could only retire at age 50 or 55, depending on their occupation. The new rules gradually reduce the retirement age to 63 for men and 55 or 58 for women.

The measures, which were passed by the country's top legislative body in July following signals from a key Communist Party body, also include extending the minimum working period for workers to receive a monthly pension from 15 to 20 years. The changes are set to come into force in 2030.

They also include some flexibility regarding the retirement age, particularly for those who have already completed the minimum working period.

The change, which the government has been considering for about a decade, comes at a time when China's economy is slowing and Beijing is grappling with the looming consequences of a rapidly aging population and a pension crisis.

The announcement immediately sparked widespread discussion – and backlash – on China’s social media.

Some social media users were pleased that the changes were not more drastic and included some flexibility. One comment on the X-like social media platform Weibo, which received thousands of likes, said: “As long as there is the option to retire or not, depending on our will, I have no objection.”

Others expressed dissatisfaction at the prospect of delayed retirement and years of overwork, and expressed concern that the measure could further strain China's already difficult labor market, where youth unemployment remains stubbornly high.

“Delayed retirement means that you won’t get your pension until you’re 63, but it doesn’t mean that everyone will have a job by then!” wrote one user.

Chinese state media welcomed the planned changes in recent days as an urgent and necessary reform of an outdated system, stressing that the existing policy has been in place since the 1950s, when both life expectancy and educational levels were lower.

“The current pension policy framework has remained unchanged for 73 years. Especially since the reform and opening up (from around 1978), the demographic, economic and social landscape has changed dramatically,” demographer Yuan Xin was quoted as saying by state media earlier this week.

The existing retirement age is in stark contrast to current “national realities” and the new normal of future economic and social development, said Yuan, vice chairman of the China Population Association and a demographer at Nankai University in Tianjin.

China's existing retirement ages are lower than in many other major economies. The average standard retirement age in the Organisation for Economic Co-operation and Development (OECD) countries was 63.6 years for women and 64.4 years for men in 2022.

Other countries have also grappled with the question of how to handle retirement ages. France saw major protests in 2023 in response to the government's attempt to raise the retirement age from 62 to 64. The US is also debating pension reform and a gradual increase in the retirement age, with Social Security offering incentives to retirees who delay receiving benefits until age 70.

Demographic and economic challenges

The changes come as China's leaders grow increasingly concerned about the country's demographic challenges, with some economists warning that the still-developing country could fall into the trap of “growing old before it gets rich.”

China's population has shrunk over the past two years, recording the lowest birth rate in 2023 since communist China was founded in 1949, despite a move away from the country's long-standing “one-child policy” in 2016 and government efforts to encourage more young couples to have children.

According to a report released earlier this month by China's Ministry of Civil Affairs, older people in China now make up more than 20 percent of the population, with about 297 million people aged 60 and over at the end of last year.

Demographers quoted in state media said that between 2030 and 2035, the elderly population will make up 30 percent of the total population. This proportion is expected to rise to over 40 percent by the middle of this century – making China a “super-aged society.”

These projections have led the government to step up its efforts to expand elderly care services and support private sector efforts to build a “senior economy.”

In addition, the impact on the country's pension systems, which have to cope with a shrinking working population and a growing older population, is increasingly coming into focus.

A 2019 report by the Chinese Academy of Social Sciences, a leading government think tank, predicted that China's state pension fund would be empty by 2035 due to a shrinking working population. Years of strict pandemic-related restrictions that have shrunk local government coffers could exacerbate the pension deficit.

Early last year, thousands of elderly people in several major cities protested against massive cuts to their health insurance benefits, fearing that local governments would dip into their private accounts to make up for shortfalls in the state pension fund.

Even for people of working age, finding work remains a major challenge following the pandemic and a series of government measures in recent years. In July, youth unemployment among 16- to 24-year-olds who are not students reached 17.1 percent, while among 25- to 29-year-olds it was 6.5 percent, according to state media.

Given the economic slowdown, employers continue to hire fewer employees. Age discrimination in the hiring of people over 35 is a common problem, particularly in the technology sector.

The new regulations also call on the state to “support youth employment and entrepreneurship, strengthen job creation for older workers… and strengthen the prevention and fight against age discrimination in the workplace.”