China to raise retirement age gradually

China has announced a gradual increase in the statutory retirement ages, starting in 2025. The change, which is the first since the 1950s, will be phased in over 15 years.

Here is the least surprising bit of demographic news out of China: https://t.co/mCsPWgaRxs

— Simon Kuestenmacher (@simongerman600) September 17, 2024

Men’s retirement age will rise from 60 to 63, while women’s will increase from 50 to 55 for blue-collar workers and 55 to 58 for those in white-collar positions. The policy is expected to add one month of work every four months.

Is the US next? Chinese government, in one fell swoop, approved two measures to prop up that country’s wobbly retirement system: an increase in the retirement age and a hike in the number of years workers must labor to qualify for a monthly pension https://t.co/4gP89DtyMA

— Daniel P. Aldrich urbanists.social/web/@dpaldrich (@DanielPAldrich) September 16, 2024

The announcement has sparked anxiety and frustration among Chinese netizens, with many expressing concern over the pressures facing younger generations. One user on Weibo wrote, “After finally buying a house, getting married, and having children, now we are being hit by another blow. And now retirement is delayed—we don’t know what will happen to us next.”

Running out of funds, China decides to raise retirement age for first time since 1950s. Important thing to note here is that people can’t retire before scheduled retirement. This news is dedicated to those who are fond of China Model. https://t.co/RyYXWRySJ3

— ASHWANI MAHAJAN (@ashwani_mahajan) September 16, 2024

This is why Yi Fuxian / Peter Zeihan-style hysteria re: demographic-driven collapse never made sense.

If the fix were as simple as raising the retirement age by 3-5 years, this was never the extinction-level-event threat it was made out to be.https://t.co/NxKkwByMOt

— Glenn (@GlennLuk) September 16, 2024

Another user pointed out that only two types of people need not worry about delayed retirement: “those who do not live to retirement age” and the unemployed. Despite the increase, China’s new statutory retirement ages remain lower than those in many other major economies.

China’s aging population impacts policies

In the U.K., the retirement age is 66, while in the U.S. and Germany, it is 66 or 67, depending on the retiree’s date of birth. China’s aging population is a significant factor in raising the retirement age. At the end of 2023, the country had 297 million people over the age of 60, according to government statistics. This number is projected to reach 400 million by 2035. The Chinese government has emphasized the reform’s flexibility, allowing workers to retire up to three years earlier than the new statutory ages if they meet the minimum pension contribution requirements. Some experts argue that the reform is necessary to ensure the long-term sustainability of China’s pension system. Xiujian Peng, a senior research fellow at Victoria University in Australia, told the Associated Press, “We have more people coming into the retirement age, and so the pension fund is facing high pressure. That’s why I think it’s now time to act seriously.” The reform seeks to address a looming pension shortfall in a future that may see fewer young workers supporting a growing elderly population, as China’s birth rate remains one of the world’s lowest at just 1 birth per woman, despite the relaxation of the one-child policy and various government efforts to encourage childbearing.