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Buried among dozens of paragraphs in a new document from Beijing, one line has sent shock waves through China’s workforce.
Last week, the country’s leaders met to discuss the direction of the economy. Dozens of resolutions announced On Sunday, they expressed a range of wishes, including a desire to raise the standard retirement age.
Without giving specifics, the resolution stresses that any changes would be “voluntary and flexible.” Still, the signs are clear: Beijing is finally ready to change the rules that have governed people’s lives for more than six decades.
The move has been hugely unpopular, as it has been in other countries. FranceIn 2023, workers protested a similar ruling.
Chinese people took this statement as the beginning of the end of the monolithic working life they had known since the 1950s.
As of Thursday, the hashtag “late retirement” had seen 130 million views on Xiaohongshu, China’s version of Instagram. A similar thread this week on Weibo, China’s version of Xinjiang, complained but was later censored.
But experts and think tanks have long argued it is a policy change badly needed by China’s ageing population.
China’s low retirement age
In China, women in blue-collar jobs can retire and receive a pension at age 50, and women in office jobs can retire at age 55. Even the retirement age of 60 for Chinese men is The global average is about 64.
“This is a standard that was set in 1951, but looking back it’s outdated because life expectancy at birth was 43 years in 1950 and 48 years in 1958,” Sabrina Luk, an assistant professor of social science at Nanyang Technological University in Singapore, told Business Insider.
China’s life expectancy has risen to 75.4 years for men and 80.8 years for women. Official government statistics.
“This change is probably 20 years overdue,” Sean Lane, founder of the Shanghai-based China Market Research Group, told BI.
“It’s absurd to expect someone to graduate from college or technical school at 22, work for 28 years and then spend 30 to 40 years in retirement,” he added.
Luke, who studies ageing in Asia, said Beijing could consider setting a national standard for retirement age for both men and women. Currently, Beijing has an unfair policy that allows women to retire up to 10 years earlier, even though their life expectancy is much longer than that of men.
“In almost every country, women live on average about four years longer than men,” she says. “In China, women live more than five years longer than men.”
Some think tanks, including state-run think tanks, Chinese Academy of Social Sciencespredicts that the country will aim for retirement age 65 for all workers. There is no official announcement yet on the new retirement age or whether it will become standard.
Pension issues
China’s pension funds are key to retirement reform.
Most Chinese workers receive state pensions, augmented by severance pay from their employers and personal contributions, and it is the state fund that workers overwhelmingly rely on.
However, like other countries in East Asia, the country is ageing rapidly. 254 million people The number of people over 60 is expected to grow to 400 million by 2040, more than the entire population of the United States.
“This is a big problem for China,” Gu Qingyang, an associate professor of public policy at the National University of Singapore, told Business India. “The state fund depends on the government budget, which is heavily dependent on the overall economy. And we all know that China’s current economic situation is not that good.”
China is concerned about a shortage of funds to pay pensions due to a rise in the number of pensioners and a decline in the young workforce to cover them. It could be completely depleted by 2035.
And that was before the Zero Covid mandate, when local governments, normally responsible for funding state pensions, had spent years pumping billions of dollars into lockdowns, quarantine centers, testing facilities and swab kits.
By the time China emerged from its coronavirus battle, some pension systems were already in the red. Anger flooded the streets At least four major cities have begun cutting health benefit payments in early 2023.
Delaying when people start receiving checks could help ease the financial strain, but it is not yet clear whether China plans to delay the pension age along with the retirement age.
In any case, experts say Beijing will need more than a simple policy change to resolve the crisis.
“Can raising the retirement age really ensure a sustainable pension system? That’s the question,” Luk said. “It’s not that simple.”
Young people in China feel betrayed, but should they feel that way?
The partially censored backlash on social media and the lack of street protests indicate that young people in China probably feel most disadvantaged by the increase in the retirement age.
Many people are already suffering from low wages and unemployment due to the economic downturn, and some believe that extending working hours for older workers will take away jobs from the younger generation.
“What kind of situation is this? Young people can’t find work, they’re not allowed to drop out of school, and the elderly are forced to work so hard they can’t even retire?” a Shanghai-based investment blogger wrote on Weibo.
“What about youth employment rates? If young people can’t find work and support themselves, how can they get married and have children?” Another investment blogger wrote:
The change has spawned hundreds of memes on Xiaohongshu. Popular Videos The film depicts an elderly man working as a Louis Vuitton salesman.
But experts say it is the younger generations who will benefit most.
“The pension system is essentially created for the younger generation to support the older generation,” Gu said. “The tax burden on them would have been very heavy.”
For many women, the change could ultimately mean an extra 15 years of work, according to think tank estimates. Still, China Market Research Group’s Mr. Lane believes the decision will be an overall positive for women.
“If a man and a woman are both 46 years old and the woman is retiring in four years, who would you promote?” he said.