Anger flares anew as China moves closer to raising retirement age

Society & Culture

China’s national pension fund is running out of money as people live longer at the same time as the number of young people in the labor force is declining.

china old people

China has a looming pension crisis: the state pension fund is projected to run out of money by 2035 because of the rapidly aging population and a declining labor force. As a result, the government has for some years been hinting that workers would need to delay their retirement, despite strong opposition from the public. Now it seems like Beijing is finally ready to put the idea into action: According to a 15-year blueprint unveiled this week, a pension reform is one of the government’s “pragmatic” targets through 2035.

The document (in Chinese), published by Xinhua on November 3, outlines a wide range of “long-term objectives” that China aspires to achieve in the next 15 years. In a section about “Improving people’s quality of life and raising the level of social construction,” the paper states that China will “gradually” raise the eligibility age for retirement pensions.

Drafted by China’s top leaders, the proposal received a unanimous vote of approval in late October, when officials of the Central Committee of the Chinese Communist Party gathered in Beijing for their annual meeting, which is formally known as a plenum.

While the document does not address specific issues regarding the reform — such as how far the government will go when raising the age and whether there will be different changes for different genders, several publications were quick to tap into their sources to shed more light on the proposal.

Per China Economic Weekly (in Chinese), two possibilities are under serious consideration among people who have the power to influence the final decision. At present, the retirement age in China is 60 for men. For women, it is 50 for blue-collar workers and 55 for civil servants. According to Y áng Lìxióng 杨立雄, a professor at the School of Labor and Human Resources at Renmin University, the first option is to make the retirement age same for men and women and then lift the age for collecting state pensions for both men and women. The other plan is to firstly raise the age for the two genders separately and eventually take an extra step to make the retirement age the same for women as it is for men.

Yang told the magazine that he was in favor of the first method because raising women’s retirement age was a matter of acute urgency. “For now, some women retire at 50, which I think is too soon,” Yang siad. “It’s imperative that we apply the same rule to men and women first. Moving forward, we can make the changes for women more drastic.”

Despite the lack of details, the proposed reform has been a target of intense criticism on the Chinese internet. It was opposed by both older Chinese, who feared that they wouldn’t live long enough to collect benefits, and by young adults worried that keeping people longer in the workforce would harm their own employment opportunities.

“How about not allowing people to retire until they are 80? We will go straight to crematoriums after reaching the retirement age, leaving no burden to the country. Is this what the government wants down the road?” a Weibo user wrote (in Chinese). “If the state pension fund is really running dry, the country should find the money it needs by cutting budget or fighting corruption,” another one commented (in Chinese).

In the 1950s, under the influence of the Soviet Union, China introduced the current retirement age limits and maintained the policy after the Sino-Soviet split. By keeping the age unusually young — in comparison, the typical American leaves the workforce at age 63, China was hoping to bring more young people into the workforce and capitalize on their fresh ideas and healthy bodies. Meanwhile, at that time, short life expectancies ensured that the pension taxes collected by the country were sufficient to cover the benefits it had to offer.

In addition, the decision to let women retire sooner than men was also a calculated move on the government’s part, which — at that time — needed mothers and mothers-in-laws to go back to their families and perform domestic work while keeping young women in the labor force.

With an aging population and low birthrate, China is dealing with a completely different problem today. The chilling effects of a shrinking workforce and a rapidly growing number of seniors are predicted to be severe.

This story has been updated with a correction of when China adopted retirement age limits. The correction is made by Martin K. Whyte, co-author with William Parish of Urban Life in Contemporary China (1984).