China plans to raise the retirement age

This is what the Chinese business press is buzzing about today:

China plans to raise the retirement age gradually, the head of the Chinese Academy of Labor and Social Security Sciences told state media outlet Global Times yesterday China currently has one of the lowest retirement ages in the world, at 60 for men and 55 for women. The official did not specify new ages.

Raising the retirement age would bolster the country’s pension system, which is set to come under stress due to demographic trends. Going forward, China’s pension system will have fewer contributions and more demands as China’s working population shrinks and its elderly population grows.

Chinese media reported the news, citing the Reuters report linked above, which itself cites an interview in Global Times.

China is gradually recovering from the pandemic, according to National Bureau of Statistics data for January and February. Industrial output, infrastructure investment, and consumption all increased from a year ago, and the catering industry, harder-hit by COVID than other sectors, surged more than 9% year-on-year. Retail sales of consumer goods were up by 3.5% and investment in fixed assets was also up.

One metric that did not improve, however, was property investment, reflecting investors’ still tepid feelings on China’s real estate market. Part of the problem is that China’s policy response to ongoing fallout in the property market has focused on state-owned enterprises, while doing little to help private firms.

Tourism is another sector that analysts say will be slower than expected in recovering from the pandemic. Demand for travel has not yet bounced back, and China’s hotels, airlines, and other tourism-related infrastructure fired millions of employees during the lockdowns and have yet to hire them back.

China’s Ping An Insurance Group reported a net loss of 17.56% year-on-year, the third year in a row of declining profit. Profits specifically from the company’s property insurance and asset management businesses fell 45.16% and 81.25%, respectively, contributing to the damage to Ping An’s bottom line. The conglomerate’s life and health insurance businesses also saw profit declines. The report included a few bright spots for Ping An, with the conglomerate’s banking business, Ping An Bank, seeing a 25.3% increase in profits year-on-year.

Ping An’s performance puts a damper on a generally positive outlook among analysts for the insurance industry in 2023, who cite positive policy signals from recent high-level government meetings, pent-up demand in the wake of the pandemic, and growing adoption of new technologies.

The electric vehicle price war in China may be over: A growing chorus of new energy vehicle companies is publicly saying they will not enter into a burgeoning price war in the industry. NIO’s assistant vice president of sales told the media yesterday that the company would weather cyclical price fluctuations of both internal combustion engines and new energy vehicles without engaging in price-slashing tactics. Executives from Porsche, Audi, and several Chinese firms have made similar comments in recent days.

The Chinese business press has been predicting a price war among the country’s EV companies, pointing to Dongfeng Motor’s subsidies of up to 90,000 yuan ($13,096) for buyers in Hubei Province earlier this month. Car-makers SAIC, FAW and others soon made some price cuts after, leading observers to predict a race to lower prices.