China to raise retirement age to 65 as pension expenses mount

China is all set to raise its statutory retirement age to 65 for all citizens. The decision is an outcome of mounting pressure on the nation’s pension system, driven by an aging population and dwindling workforce.

The plan to raise retirement age was passed during a meeting of the Communist Party Central Committee in July this year, and the policy is expected to be fully operational by 2029. A Chinese Academy of Sciences report stated 65 looks set to be the new retirement age.

Currently, the retirement age for men in China is 60. For women in white-collar jobs, the retirement age is 55 while those employed in blue-collar professions have to stop working at 50. China’s retirement policy has remained the same for over seven decades now and the country’s retirement age across professions is among the world’s lowest.

The decision to raise the retirement age is largely owing to growing pressure on the nation’s pension system. China’s pension system, with 1.05 billion contributors and beneficiaries, is the world’s biggest. Analysts feel the system is increasingly becoming difficult to sustain, with 11 out of 31 provincial jurisdictions experiencing pension budget deficits.

China’s one-child policy from 1980 to 2015 is the other factor driving the need to raise retirement age. The country currently has a population of 1.4 billion, which is aging fast, and the erstwhile policy has led to a drop in the overall number of working-age citizens.

As of 2023, China’s population of 60 or above is 297 million and the number is predicted to exceed 400 million by 2035. Life expectancy of the Chinese people rose to 78 in 2021 from 44 years in 1960, and is expected to cross 80 by the year 2050.

Meanwhile the decision to raise retirement age has triggered social media debate among netizens of the country. Supporters welcomed the move saying countries such as Canada have benefitted from a high retirement age of 65. Critics of the decision feel that the decision could come as a threat for job security as well as lead to favouritism on grounds of age, considering contemporary work culture is stacked in favour of the youth. Many have pointed out that the stark rural-urban divide that exists in China can make pension reform a problematic issue in that country.