[Video] Why is China raising the retirement age?
China is set to gradually raise its retirement age from 1 January 2025, changing a policy that has remained untouched for over 70 years. The retirement age for men will rise from 60 to 63, while for women, it will increase from 55 to 58 for white-collar workers and from 50 to 55 for blue-collar workers, over a period of 15 years. Why is this policy shift necessary now? ThinkChina’s Lu Lingming ponders the question.
China’s pension system is facing significant strain due to rising life expectancy. In 1951, when the system was established, the average life expectancy was about 40 years. By 2024, it had almost doubled to 78.6 years, yet the retirement age has remained unchanged — 60 for men and 55 or 50 for women. As people live longer, the financial burden on the government increases, especially as pensions are paid over longer periods than initially projected.
China’s pension system relies on contributions from current workers to pay for retirees. However, the working-age population dropped by 141 million from 2012 to 2023, a decline linked to the one-child policy and lower birth rates. In 2019, there were 2.65 workers supporting one retiree, but by 2050, this ratio will fall to just over 1 worker per retiree, straining the system further as the workforce continues to shrink and unemployment among youth rises.
To address these issues, the Chinese government plans to gradually raise the retirement age starting in 2025, offering flexibility for individuals to retire earlier or later. However, its success will depend on careful implementation and balancing economic realities with social expectations. While raising the retirement age may help alleviate some pressure on the pension system, it also raises concerns about age discrimination and labour market inequality, especially between public and private sectors.
The outcomes of this policy change will impact not only the pension system but also the country’s ability to navigate its demographic and economic challenges effectively.
