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China is to raise the retirement age for the first time since 1978, as the world’s second-largest economy faces up to a sharply ageing population that will leave it short of workers.
The country will gradually extend the retirement age for all men from 60 to 63, for women in white-collar jobs from 55 to 58, and for women in blue-collar work from 50 to 55, state-owned news agency Xinhua reported on Friday.
The measures were approved by the standing committee of China’s rubber-stamp parliament on Friday. They will take effect in January and be phased in over 15 years in line with the principle of “small-step adjustments”, Xinhua said.
Analysts say China needs to act because its low retirement age and declining birth rate are driving up the old-age dependency ratio — the number of retirees to the working-age population.
The country’s population declined for a second consecutive year in 2023, to 1.4bn, as deaths outstripped births by 2mn.
China’s policymakers have grappled with the issue for years and the change to retirement ages had been previewed at a five-yearly Communist party policy meeting in July.
The move comes as households are under pressure from slowing economic growth, a prolonged property sector slump and a weak job market that is weighing on domestic consumption.
Zhang Jin, director of the Research Institute of China Health and Elderly Care Group, said the move would benefit the economy.
Between 2023 and 2035, more than 20mn people in the country would reach retirement age each year, he said.
“If you delay their retirement, they can both create value and drive consumption,” he said, adding that after people retired, their spending usually drastically decreased.
But the shift has sparked indignation among younger people, who complain they will now have to work for longer to support older people.
“Today I saw the news and I’m seriously doubting whether I can live until retirement,” Zhao, a Beijing-based female white-collar worker, said, half-jokingly. “Surely I won’t be working for my entire life?”
Older workers also expressed frustration. Chen, a 52-year-old civil servant in Zhejiang, said “the bottom line is that they strip my retirement time and basically take my money from my pocket”. He added he would lose “two and half years of pensions”.
Many of China’s young people have no siblings, due to the now defunct “one-child policy”, which limited the country’s birth rate for decades before it was eased in 2016.
China also needs to keep its population in the workforce for longer to ease pressure on its underfunded pension systems, analysts said.
Under the changes, both retirement ages and pension contribution periods will be gradually extended.
Starting in January 2030, the minimum contribution period to receive the basic monthly pension payment will steadily rise from 15 years to 20 years, with an increase of six months each year.
Those who have already reached the minimum contribution period can opt for early retirement within certain limits. Those who reach the retirement age can also apply to keep working for up to three years.
Using a broader definition of the working age than that set by China’s current retirement ages, the Center for Strategic and International Studies estimated that China’s old-age dependency ratio was 21 per cent last year, against 27 per cent for the US.
The think-tank used a broader definition than that set by the current retirement age, comparing people aged 65 and older with those aged 15 to 64.
This figure is set to rise to 52 per cent by 2050 — compared with 39 per cent for the US — and hit 83 per cent by 2100, when the US ratio will be 55 per cent, according to CSIS.
According to the OECD, the average retirement age across its 38-member countries is around 64 for men and 63 for women.
Some countries, such as Iceland, Norway and Denmark don’t provide full pension benefits until individuals reach the age of 67.
At the other end of the spectrum, Turkey has the lowest retirement age of OECD members with women being able to retire as early as 49 years old and men at 52.
Additional reporting by Mary McDougall in London
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