Spark Deep Dive: China raises retirement age due to pressure from ageing population

China will raise its retirement age as it battles a slow economy and growing pressure from an ageing population.

The retirement age for men will rise from 60 to 63 and for female office workers from 55 to 58. It was decided by the Standing Committee of the National People’s Congress, the country’s top legislative body.

The biggest increase affects female blue-collar workers. Before, they could retire at age 50. Now, they have to wait until they are 55.

The previous retirement ages were well below those in most developed economies. In Japan, people can begin receiving pensions at 65. In South Korea, the pension age is 63.

Last year, 21.1 per cent of China’s population was aged 60 or above. According to the Economist Intelligence Unit, that number could rise to 32.7 per cent by 2035.

Xinhua, China’s state news agency, said the changes will take effect from January 1, 2025.

The move was necessary, said Wang Xiaoping, minister of human resources and social security. She said the original retirement rules were devised in the 1950s. However, China’s economic, social and demographic structure has changed over the years.

The country’s development overlapped with families having fewer children. There were also decades of birth restrictions under the former one-child policy. Now, China has a growing senior population and fewer young people.

“The new plan can help us better use human resources, effectively increase our labour force, and satisfy people’s diverse needs for more work or private lives,” she said.

Huang Wenzheng is the director of a Beijing-based private think tank focused on demographic and public policy analysis. He said the new changes were in line with expectations.

“This is mainly because China’s pension pool is drying up. As birth rates fall and life expectancy increases, the proportion of elderly is increasing. The working population, or those paying into the pension pool, is becoming less and less,” he said.

The Chinese Academy of Social Sciences has warned that, based on current trends, the pension system will run out of money by 2035. It also said more people are set to retire than enter the workforce.

Huang said the new policy might affect young people’s jobs and their willingness to have children. Many choose to have their retired parents help raise their children. Delayed retirement might stand in the way.

1. Which of the following statements are true based on the information in the news?

(1) The new retirement age for female office workers is 55.
(2) The current retirement ages were set when poverty was more common and before life expectancies rose.
(3) The pension system will run out of money in about 11 years.
(4) The one-child policy helped balance China’s ageing population.

A. (1), (2) only
B. (1), (3), only
C. (2), (3) only
D. (3), (4) only

2. According to the news, why was there a need to raise the retirement age in China?

3. Based on Huang’s statement, what role do young people play in the country’s pension schemes and the new retirement age?

1. What does the cartoon say about China’s new retirement policy?

2. Based on the news and the cartoon, what effect could a higher retirement age have in China?

blue-collar workers: people who work in manual labour or skilled trades. Blue-collar jobs include electricians, plumbers, factory workers, construction workers, and truck drivers. Although they often do not require a university degree, they can be very tough and physical.

pensions: a regular sum of money paid to people who have retired, usually from the government

one-child policy: a government policy in China from 1980 to 2015 aimed at keeping the country’s population from rising too quickly. This policy told families they could only have one child. In 2016, the country raised the limit to two children. Beijing announced at the end of May 2021 that it would allow each couple to have three children.

life expectancy: the average age a person in a specific population is likely to reach before death. Life expectancies are rising as the world develops.

1. C

2. The retirement age was established decades ago when life expectancy was shorter and there was more poverty. Now that life expectancy continues to rise, this means that people will spend more years not working. Moreover, the one-child policy has led to low population growth and potentially a population decline. This means there aren’t enough workers to replace the older ones who are retiring, and more people are taking from the pension scheme than paying into it.

3. Young people pay into the pension pool, but it is drying up because there are more elderly people drawing from it than young workers paying into it. This puts people who depend on pensions at risk and raises questions about whether the scheme will even benefit young workers when they eventually retire. Therefore, instead of fixing the pension scheme, he thinks that government policies should focus on balancing the population as a whole and raising the birth rate. Unfortunately, as Huang points out, fewer people are having children and the number may even continue to drop now that their parents have to work longer and cannot help raise a child.

1. This cartoon shows a middle-aged man, likely an office worker, running to reach “retirement benefits.” The sign for the benefits has been moved from the 60 mark to the 65 mark. This represents the increase in retirement age and shows how people have to “run” longer to reach it.

2. A higher retirement age could make people feel stressed from a young age because they have to save more to plan for their future. Older individuals may also feel upset and stressed because many were likely planning to retire soon, but now they will be forced to work several more years.