China is set to raise the retirement age for the first time since 1978, a move expected to help stabilize the shrinking workforce and support the economy.
The nation’s top lawmakers have approved a plan to gradually increase the retirement age, the official Xinhua news agency reported on Friday. Over the next 15 years, China will raise the retirement age for men to 63 from 60 and for women to 58, according to the report. This change will go into effect on January 1, 2025.
This approval follows a July announcement by the ruling Communist Party that the retirement age will be increased in a “voluntary, flexible manner.” By allowing more people to work for longer, the government hopes to address the challenges posed by an aging population, which is impacting the world’s second-largest economy, although it risks increasing public dissatisfaction amidst an economic slowdown.
Discussions about this plan earlier this week sparked widespread anger on social media, with many users expressing concern about a sluggish job market. Some also pointed out the prevalence of discrimination against older job seekers, an issue the government vowed to address last month.
China’s retirement age is among the lowest globally despite a significant increase in life expectancy. Since the 1970s, the retirement threshold for white-collar workers has been maintained at 60 for men and between 50 and 55 for women. Previous attempts to raise the retirement age, such as in 2008, failed to gain legislative approval.
A larger tax base and delayed access to benefits will help alleviate the pressure on the government to fund pensions as the population rapidly ages, with the birth rate last year.
People aged 65 and older are expected to constitute 30% of the population by around 2035, up from 14.2% in 2021, according to a report by state broadcaster CCTV on Tuesday.
Bloomberg Economics’ Eric Zhu stated that this move will be beneficial for the country in the long run but could negatively impact sentiment at a time when reviving economic growth is crucial.
“It could exacerbate an already acute problem of as older workers stay in their jobs longer,” Zhu wrote in a report this week, citing the increase of the jobless rate for those aged 16-24 to to 17.1% in July.
