No one should be surprised that China is raising its retirement ages. They are currently among the lowest in the world and haven’t shifted for decades, even as lifespans have lengthened dramatically. Women currently retire as early as 50 and men at 60, while life expectancy is around 78 – up from 44 in 1960. Now the male retirement age is to rise to 63, while women’s will rise to 55 (for blue-collar workers) and 58 (for white-collar employees). These changes will be phased in over the next 15 years. Employees will also have to make more contributions from 2030.
China is far from alone in facing the problem of too many old people and too few young workers to support them. But unlike western nations, it is getting old before it has got rich. The scale of the challenge and the speed at which it is arriving are extraordinary, thanks in large part to the decades of birth restrictions known as the one-child policy. It also means that fewer retirees are able to count on their kids supporting them.
The government has not only stopped limiting family size in recent years, but begun to frantically urge young couples to have more children. The young couples aren’t too keen. The population fell by 2.75 million people in 2023, its second decline in as many years, while Chinese state media says that the number of over-65s will have doubled to 30% of the population by 2035, from 14.2% in 2021. The Chinese Academy of Social Sciences warned in 2019 that the country’s pension pot would run dry by 2035 if nothing was done – and that was before Covid‑19 pounded its economy. The question is whether these measures approach the level of change needed, given the greying of the population. Some areas have already made cuts to medical benefits, particularly for the elderly, prompting protests.
One long-term observer of Chinese economics, Eswar Prasad of Cornell University, warns that the economic outlook is “flashing red, or pretty close to red”. The “wild ride” that China enjoyed in the years of double-digit growth, with profound insecurity but the glitter of future riches to dazzle its citizens, is over. Now it is shifting back towards a more paternalistic model, with tighter restrictions on economic and social life, but promises of greater security. The social safety net has unquestionably expanded. But many are sceptical of the state’s ability to provide the kind of life they want.
High youth unemployment, the cost of living and profound uncertainty about the future has already left young people less able or willing to pay into pensions. They are pausing contributions or opting out, sceptical about getting much back when their time comes. Buzzwords of recent years, such as “lying flat”, have captured the sense of many that lengthening hours and limited returns mean the hustle just isn’t worth it. At the other end of the age scale, some may struggle to keep working or keep their jobs in a country where some bosses regard 35 as superannuated.
“When I was born they said there were too many. When I gave birth they said there were too few. When I wanted to work they said I was too old. And when I retire they say I’m too young,” one disgruntled internet commenter wrote. Making people wait longer for their pensions is never going to be politically popular – just ask France’s president, Emmanuel Macron. In China, the issue is not just about defusing the demographic timebomb. It’s an economic and social challenge too.
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