HONG KONG, Sept 11 (Askume) – China’s top legislative body this week reviewed an official plan to push back China’s retirement age, one of the lowest in the world, in a key step toward overhauling decades-old labor laws and easing economic pressures from a shrinking workforce.
The ruling Communist Party said in July that China would gradually raise the retirement age. Currently, the retirement age for men is 60, about six years lower than most developed economies, while it is 55 for women in white-collar jobs and 50 for women in factories.
Forcing people to work longer would ease some of the pressure on pension budgets as many Chinese provinces are already facing huge deficits. It would also delay pension payments and force older workers to stay on the job longer, which may not be popular with everyone.
The topic, which has become a hot topic on Chinese social media, was discussed by senior members of the National People’s Congress in Beijing on Tuesday, with many blaming more job seekers for the lack of vacancies, state news agency Xinhua reported.
“This is an inevitable choice for China to adapt to the new normal of population growth,” Mo Rong, president of the Chinese Academy of Labor and Social Sciences, told the People’s Daily.
In 1960, the average life expectancy in China was about 44 years, which will rise to 78 years in 2021, and is expected to exceed 80 years in 2050. Improvement is urgent. At the same time, the working population needed to support the elderly is declining.
National health officials estimate that the number of people aged 60 and over will increase from 280 million to more than 400 million by 2035, equivalent to the current population of the United Kingdom and the United States combined.
Every Chinese retiree now requires the contributions of five workers, a ratio that will reach 4:1 in 2030 and 2:1 by 2050.
According to Ministry of Finance data, 11 of China’s 31 provincial-level regions have pension budget deficits. The CAS government believes the pension system will run out of money by 2035.
Work problems
A draft change to the law to adjust the retirement age is expected to be published for public comment in the coming weeks.
Xinhua’s post garnered more than 100,000 comments on social media platform Weibo from individuals concerned about rising unemployment among young and old people due to delayed pension payments.
“Young people can’t find jobs, middle-aged people are worried about being laid off, and now there’s another problem: old people can’t retire,” said one Weibo user.
Stuart Gietel-Basten, a professor of social science and public policy at the Hong Kong University of Science and Technology, said raising the retirement age is unlikely to prompt young and old people to seek the same jobs.
“Older people are going into different types of jobs, blue-collar and white-collar jobs, as opposed to entry-level jobs,” he said.
In Japan and South Korea, people have to wait until ages 65 and 63, respectively, to collect their pensions because life expectancy is longer there.
However, raising the pension age may be more complicated because of differences between China’s provinces and between urban and rural areas.
“When you think purely about life expectancy, it should increase, but it has to be done in a proper way, especially if you’re an immigrant or a gig worker who moves around a lot, you may not understand it,” Gittel-Baston said.
