BEIJING (AP) — Starting next year, China will raise the retirement age for its youngest workers, now the youngest of any major economy in the world, to address a shrinking population and an aging workforce.
The Standing Committee of the National People’s Congress, the country’s legislative body, passed the new policy on Friday after suddenly announcing earlier this week that it was considering the measure, state broadcaster CCTV reported.
The policy change will be implemented over 15 years and will raise the retirement age for men to 63 and for women to 55 or 58 depending on their occupation. The current retirement age is 60 for men and 50 for women in blue-collar jobs, and 55 for women in white-collar jobs.
“More and more people are retiring and pension funds are facing huge pressure, so I think now is the time to act seriously,” said Peng Xiujian, a senior research fellow at Australia’s Victoria University who studies the relationship between China’s population and the economy.
The previous retirement age was set in the 1950s, when life expectancy was only around 40, Peng said.
The policy is set to take effect from January, with the changes taking effect in stages based on people’s dates of birth, according to an announcement by China’s legislature.
For example, according to a table published with the policy, a man born in January 1971 would be able to retire in August 2032 at age 61 years and 7 months. A man born in May 1971 would be able to retire in January 2033 at age 61 years and 8 months.
Experts say the measure is long overdue because of demographic pressures: By the end of 2023, China will have nearly 300 million people over 60. By 2035, that figure is expected to reach 400 million, more than the population of the United States. The Chinese Academy of Social Sciences has previously predicted that public pension funds will run out of cash by that year.
The pressure on social security, including pensions and social security, is not unique to China. The United States is also facing this issue, and analysis shows that it is currently By 2033, the Social Security Fund will not be able to pay full benefits to citizens.
“This is happening everywhere,” said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, “but the challenge is even greater in China, with its large elderly population.”
In addition to falling birth rates, younger generations are also refraining from having children due to the high costs. In 2022, China’s National Bureau of Statistics reported that for the first time, the country’s population had fallen by 850,000 people year-on-year as of the end of the year. The turning point from population growth to decline. In 2023, The population has declined further2 million people participated.
This means that the burden of funding the pensions of the elderly is shared among a smaller number of younger workers, as pension payments are primarily funded by deductions from the working population.
The researchers gauge the pressure by looking at something called the “dependency ratio,” which compares the number of people over 65 to the number of workers under 65. In 2022, that figure stands at 21.8%, meaning roughly five workers support one retiree, according to government statistics. That ratio is expected to rise, meaning fewer workers will be able to shoulder the burden of each retiree.
Experts say making the necessary course corrections will be painful in the short term, at a time when youth unemployment is already high and the economy is struggling.
A 52-year-old Beijing resident who gave his surname as Lu and will retire at 61 instead of 60, said he welcomed the change. “I think it’s a good thing, because our society is aging and the retirement age is higher in developed countries,” he said.
Li Bin, a 35-year-old who works in the event planning industry, said he felt a little sad.
“I’ve lost three years of leisure time. I was originally planning to travel after retirement,” she said, but she said it was better than she expected, as the retirement age for white-collar women was only raised by three years.
When the policy review was announced earlier this week, some comments on social media reflected anxiety.
But of the 13,000 comments on Xinhua’s post breaking the news, only a few dozen were available to view, suggesting that many others had been censored.
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Wu reported from Bangkok. Video producer Caroline Chen in Beijing contributed to this report.