China approves plan for first hike to retirement age since 1978
The move likely to slow a decline in the labour force and support the economy
Beijing: China will raise the retirement age for the first time since 1978, a move likely to slow a decline in the labour force and support the economy.
The country's top lawmakers endorsed a plan to gradually delay retirement, the official Xinhua News Agency reported Friday. China will increase the retirement age for men from 60 to 63, and for women from 50 and 55 to 55 and 58. This change will take place over 15 years, starting on January 1, 2025.
The approval followed a July announcement by the ruling Communist Party that the retirement age will rise in a "voluntary, flexible manner." Allowing more people to work longer will counter demographic headwinds weighing on the world's second-largest economy, although it risks adding to public discontent amid an economic slowdown.
The top legislature's discussion of the plan earlier this week triggered an outpouring of anger on social media, where many complained about a sluggish job market. Some users also pointed out how employers often discriminate against older candidates, a problem that the government last month vowed to address.
China's retirement age is among the world's lowest despite significantly increased life expectancy. Since at least the 1970s, the threshold for white-collar workers has been kept at 60 for men and between 50 and 55 for women. Previous discussions on raising the age, such as in 2008, had failed to reach the legislature.
A bigger tax base and delayed access to benefits will relieve the pressure on the government to fund pensions as the population rapidly ages, with birth rate falling to a record last year.
People aged 65 and older are expected to make up 30% of the population by around 2035 from 14.2% in 2021, according to a report by state broadcaster CCTV on Tuesday.
Bloomberg Economics' Eric Zhu said the move will help the country in the long run but risks hurting sentiment at a time when reviving growth depends on it.
"It could exacerbate an already acute problem of high youth unemployment as older workers stay in their jobs longer," Zhu wrote in a report this week, citing the increase of the jobless rate for those aged 16-24 to to 17.1% in July.