Understanding China's gradual increase in retirement age: What to expect?

Chinese lawmakers on Friday voted to adopt a decision on gradually raising the statutory retirement age in the country, marking the first adjustment in the arrangement since the 1950s.

According to the decision adopted at the 11th session of the Standing Committee of the 14th National People's Congress, the statutory retirement age for men will be gradually raised from 60 to 63 over the course of 15 years starting in 2025, while that for women cadres and women blue-collar workers will be raised from 55 to 58 and from 50 to 55, respectively.

The decision also specifies measures to refine the old-age insurance incentive mechanism, implement the employment-first strategy, ensure the basic rights and interests of workers who have passed their statutory retirement age, and improve elderly care and childcare services.

In a recent interview with CGTN discussing the effects of gradually raising the statutory retirement age on the country's labor market, Song Jian, deputy head of the population development studies center at Renmin University of China, explained that a gradual approach to retirement age reform, first proposed years ago, has since become a widely anticipated societal shift. Its eventual implementation is expected to impact both supply and demand in the labor market.

On the supply side, raising the retirement age is likely to mitigate labor shortages caused by the declining working-age population. Since reaching its peak in 2011, China's working-age demographic has experienced continuous negative growth, a trend that is expected to persist. Song explained that the gradual raising of the statutory retirement age will help tap into the human capital of the workforce more effectively.

On the demand side, two factors play a crucial role, Song noted. First, the willingness to work longer varies across different population groups, suggesting that a flexible, voluntary approach could guide individuals' decisions. Second, the specific demands of different positions will determine the scope for extending retirement, as certain roles require varying levels of labor quantity and quality.

Song emphasized the need for complementary policies and safeguards to support the transition. Legal frameworks must be adjusted to set appropriate statutory retirement ages, while maintaining flexibility and voluntary options for different groups.

Additionally, workplace adjustments should be made based on older workers' health and the demands of their roles, ensuring that both productivity and workers' physical and mental well-being are balanced, he added.

Strengthening family support systems is equally critical, with the development of inclusive childcare services to ease the burden on families. Finally, improving the pension system is essential to guarantee that both urban and rural retirees, across different professions, can rely on adequate financial support in their later years, Song concluded.

Amid public discussions on the gradual raising of the retirement age, concerns have surfaced about whether such a policy might crowd out job opportunities for younger workers. 

Experts argue, however, that addressing youth employment lies not in halting retirement reforms, but in expanding the overall economy to create more job opportunities. Jin Weigang, deputy head of the China Association of Social Security and a professor at Zhejiang University, highlighted this point in a recent interview with China Media Group.

By implementing targeted policies that support startups and offer incentives, the government can foster a business environment where young entrepreneurs are more likely to succeed.

The balance, Jin suggested, lies in both expanding the job market through economic growth and actively supporting young innovators, ensuring that diverse opportunities emerge for the nation's youth.

When asked how the "voluntary and flexible" retirement would be implemented and safeguarded, Jin said individuals who reach the statutory retirement age and meet the the minimum year of basic pension contributions requirements will have the flexibility to choose their retirement age within a specified range. 

This choice can be made either earlier or later than the statutory age, entirely based on personal preference. To safeguard this right, the document also stipulates that employers are prohibited from forcing employees to retire early or delay their retirement under any circumstances, Jin explained.