Editorial | Raising the retirement age inevitable amid China’s demographic changes
It is never a good time to tell people they have to work longer but if China’s public pension system is to be saved, there really is no alternative
A falling birth rate and rising life expectancy have aged China’s population, shrunk the workforce, and raised questions about outdated retirement policies and the sustainability of public pension schemes. This has long prompted discussion of the need to raise retirement ages set during an earlier stage of the country’s development, which are now lower than in other major economies and trading partners.
It is never a good time to tell people they have to work longer and put in more and get less back, let alone amid an uneven economic recovery from the pandemic slowdown and a tightening job market in which youth unemployment has been rising again.
The National People’s Congress Standing Committee has grasped the nettle, with a plan to gradually raise retirement ages by up to five years over a 15-year transition period. The decision is overdue but at least the issue is not being dragged out any further.
It is, after all, just one of several problems in a fragmented and anomalous social welfare system that need to be ironed out, such as higher pensions for public sector employees than for those from the corporate sector. Moreover, public sector employees were exempt from making pension payments until 2014.
Under China’s pension system, the young corporate working class is effectively subsidising it.
