China Announces Gradual Increase in Retirement Age to Tackle Aging Population

BEIJING — In a landmark policy shift addressing demographic challenges, China will increase its retirement age for workers starting next year. This change is intended to counteract the effects of a shrinking population and an aging workforce, placing China among the world’s major economies with relatively higher retirement ages.

The Standing Committee of the National People’s Congress, China’s legislative body, approved this measure on Friday. The decision followed an accelerated review process earlier in the week, as reported by state broadcaster CCTV. The gradual implementation will unfold over a 15-year period, with men’s retirement age rising to 63. For women, retirement will be set at 55 for those in blue-collar jobs and 58 for those in white-collar positions. Presently, men retire at 60, with women retiring at 50 for blue-collar and 55 for white-collar professions.

An increasing number of citizens entering retirement has exerted pressure on the pension system, according to Xiujian Peng, a senior research fellow at Victoria University in Australia. The previous retirement ages, established in the 1950s, were based on a life expectancy of approximately 40 years.

The policy, effective from January, will be phased in based on individuals’ birthdates. For instance, a man born in January 1971 will be eligible for retirement at 61 years and 7 months in August 2032. Another individual born in May 1971 can retire at 61 years and 8 months by January 2033.

Demographic trends, characterized by a projected 400 million people over the age of 60 by 2035, have necessitated this policy adjustment, according to experts. The Chinese Academy of Social Sciences earlier predicted a depletion of the public pension fund by the same year. This concern reflects a global issue with pension system stability, notably evident in the United States, where full Social Security benefits may not be available by 2033.

“This is happening everywhere,” noted Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. He highlighted that, given China’s large elderly population, the challenge is particularly significant. Concurrently, declining birth rates add to the complexity, as fewer younger workers support an increasing retiree population.

The dependency ratio, indicating the number of people over 65 compared to those working, was 21.8% in 2022. This suggests that approximately five workers support one retiree, a ratio expected to worsen.

The transition, though necessary, is anticipated to bring short-term challenges, especially amid current high youth unemployment levels and economic uncertainties.