China Adjusts Retirement Age to Tackle Aging Population

On January 1, 2025, China implemented its first adjustment to the statutory retirement age in over 70 years, initiating a gradual increase aimed at addressing the challenges posed by an aging population and a shrinking workforce.

The reform, approved by the Standing Committee of the National People's Congress in September 2024, outlines a phased increase over the next 15 years. For men, the retirement age will rise from 60 to 63. Women in white-collar jobs will see their retirement age increase from 55 to 58, while women in blue-collar positions will experience a rise from 50 to 55. Additionally, starting in 2030, the minimum years of basic pension contributions required to receive monthly benefits will gradually increase from 15 to 20 years, with an increment of six months annually.

This policy change comes in response to significant demographic shifts within the country. China's population has been experiencing a decline, with a decrease of 1.39 million people in 2024, bringing the total to 1.408 billion. The aging population now accounts for over 22% of the total, placing significant pressure on the social security system. Life expectancy has also increased, reaching 78.6 years in 2023, up from approximately 44 years in 1960.

The decision to raise the retirement age has sparked public debate. Younger workers express concerns about job competition and the impact on employment opportunities, fearing that extending the working age will exacerbate youth unemployment. Older workers are apprehensive about being forced to work longer without adequate pension benefits. Social media platforms have seen a surge of criticism, reflecting widespread discontent with the proposed changes.

Experts suggest that raising the retirement age is a necessary step to address the challenges of an aging society and ensure the sustainability of the pension system. Economists have long called for an overhaul of the nation's retirement age laws, currently among the world's lowest, which were set in an era of lower life expectancies. In 2023, the average life expectancy increased to 78.6 years, from roughly 44 years in 1960.

The policy introduces flexibility: individuals can opt to retire up to three years earlier or later than the statutory age, provided they meet the minimum pension contribution requirements and reach an agreement with their employers.

China's current retirement ages are among the lowest globally. For instance, countries like Australia, Denmark, and Greece have higher retirement ages. This reform aligns China more closely with international standards and reflects the need to adapt to increased life expectancy and demographic shifts.

As China navigates these demographic challenges, the gradual increase in the retirement age represents a significant policy shift aimed at balancing economic sustainability with social equity. The success of this reform will depend on its implementation and the government's ability to address the concerns of its citizens.