China has announced a significant policy change that will see an increase in the retirement age for workers starting next year. The decision comes as a response to the country's shrinking population and aging workforce. The new policy, passed by the Standing Committee of the National People’s Congress, will be implemented gradually over 15 years.
Under the new rules, the retirement age for men will be raised to 63 years, while for women it will be set at either 55 or 58 years depending on their occupation. This marks a shift from the current retirement age of 60 for men and 50 or 55 for women in different job sectors.
Experts have pointed out that the previous retirement ages were established in the 1950s when life expectancy was much lower, around 40 years. With demographic pressures mounting, the move to adjust the retirement age was deemed necessary to ensure the sustainability of the pension fund.
The aging population in China has been a growing concern, with nearly 300 million people over the age of 60 by the end of 2023. Projections indicate that this number could reach 400 million by 2035, posing challenges for the public pension fund's financial stability.
The shift in retirement age is also a response to the declining birth rate in China, which has led to a smaller pool of younger workers supporting a larger population of retirees. This imbalance is reflected in the dependency ratio, which measures the number of elderly individuals compared to the working-age population.
While the policy change is seen as a necessary adjustment, it may bring short-term challenges, particularly in a period of high youth unemployment and economic uncertainty. Social media reactions to the announcement have highlighted concerns about the impact of the new retirement age rules.
Despite the potential challenges, experts emphasize the importance of addressing the demographic shifts and ensuring the long-term sustainability of social benefits like pensions and social security. The policy change is set to take effect in January, with adjustments based on individuals' birthdates.
