- China will gradually increase its retirement age starting in 2025.
- The move addresses a shrinking workforce and rising pension pressures.
- The aging population is projected to reach 400 million by 2035.
Starting in 2025, China will begin raising its retirement age, with men retiring at 63 and women at 55 or 58, depending on their jobs.
China faces a major demographic challenge, with nearly 300 million people aged 60 or older, a number expected to grow by 100 million by 2035.
China Confronts Pension Crisis with Retirement Age Reform
The Chinese government’s decision to raise the retirement age comes after decades of a policy that no longer fits the country’s demographic reality. Set in the 1950s, the current retirement age structure was developed when life expectancy was significantly lower. However, with increased longevity and declining birth rates, this system has proven unsustainable for a nation with a rapidly aging population.
By 2035, China’s elderly population is expected to surpass 400 million, placing unprecedented pressure on social benefits like pensions and healthcare. With fewer younger workers to fund these benefits, experts have long warned of an impending shortfall in the pension system. The Chinese Academy of Social Sciences has projected that the country’s pension fund could run out of money by 2035 if no reforms are made.
The increasing retirement age is also seen as a necessary adjustment to maintain economic stability. China’s dependency ratio, which measures the number of people over 65 compared to workers, is rising, meaning fewer workers are supporting more retirees. As the country grapples with youth unemployment and economic uncertainties, the reform is expected to have both short-term economic pain and long-term benefits.
The reform, while essential, has been met with public anxiety, particularly on social media. Some citizens are concerned about the economic implications of staying in the workforce longer, especially at a time of high youth unemployment. However, experts argue that this is a crucial step to prevent future economic instability and ensure that the pension system remains viable.
China’s retirement age reform is a pivotal move in addressing its demographic and economic challenges. While it may cause initial discomfort, the long-term benefits could help stabilize the nation’s economy and ensure the sustainability of its pension system in the face of a rapidly aging population.
“This is happening everywhere, but in China with its large elderly population, the challenge is much larger.” — Yanzhong Huang, Council on Foreign Relations
