China to raise retirement age to ease pension strain

China to raise the retirement age from 60 to 65 years, within five years

China is set to raise its statutory retirement age, aiming to alleviate the mounting pressure on its pension system as the population ages and declines.

The current retirement age, unchanged since the 1950s, is among the lowest globally—60 for men, 55 for white-collar women, and 50 for blue-collar women.

While the new retirement age is yet to be confirmed, state-run media suggests it could rise to 65 for all citizens, gradually phased in by 2029.

This policy reform was approved in July during a high-level Communist Party meeting, marking a significant step in addressing the demographic challenges facing China.

The country’s pension system, the largest in the world, supports over a billion contributors or recipients. However, with a population of 1.4 billion that is both shrinking and aging, the pension system is under immense financial strain.

The number of citizens aged 60 and above is expected to surpass 400 million by 2035, while life expectancy continues to increase, further burdening the system.

Many experts argue the current pension model, which relies on a shrinking workforce to support a growing number of retirees, is unsustainable.

Already, 11 out of China’s 31 provincial jurisdictions are running pension deficits. Without reforms, the pension system could be depleted by 2035, according to projections from the Chinese Academy of Sciences.

Public response to the proposed changes has been mixed. Some argue that raising the retirement age is reasonable, noting that many Western nations already have higher retirement ages.

However, concerns about age discrimination, intense work culture, and employability of older workers have fueled anxiety. Many fear that older workers, especially those over 35, will struggle to find employment in a job market that increasingly favors younger candidates.

The divide between urban and rural populations further complicates the issue.

While urban retirees receive more substantial pensions, rural pensions are minimal, with rural workers often facing more physically demanding jobs. This disparity has sparked debate over the fairness of the proposed reforms.

While some suggest immigration could help alleviate China’s demographic challenges, experts remain skeptical.

Many believe a more comprehensive solution is required, combining policy reforms with advancements in technology to support the elderly.

As China prepares for this major shift, policymakers face the delicate task of balancing economic sustainability with the needs of an aging population.

 

 

 

 

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