China plans to raise retirement age by end of this year amid workforce crisis, decision sparks sharp reaction

The Chinese government on Friday passed a bill announcing plans to raise the retirement age of employees in the country. The entire plan formulated by the administration will be implemented over a 15-year term starting in January 2025, reports CNN.

Notably, the Chinese economy is currently facing a severe crisis of its declining economy as well as a shrinking workforce and pension funding crisis for its elderly citizens. The move has received a strong response from its citizens on social media, with citizens claiming that this is a ploy to extend their working years and prevent them from accessing their pensions as the unemployment level among the country’s youth still remains high.

As per the latest rules, the retirement age will be gradually increased to 63 years for male employees and 55 to 58 years for women, depending on their occupation. Earlier, men in urban areas were allowed to retire at the age of 60 and receive a pension, while women were allowed to retire at the age of 50 or 55, depending on their occupation.

The CNN report also claims that top government lawmakers plan to increase the minimum working period for the country’s employees to receive a monthly pension from 15 years to 20 years by 2030.

According to the same report, “Delayed retirement just means you can’t get a pension until age 63, but that doesn’t mean everyone will have a job by then!” one user wrote.

According to a report by China’s Ministry of Civil Affairs, the number of elderly people in China currently accounts for more than 20 percent of the country’s total population, which is about 297 million citizens. Chinese demographers estimate that between 2030 and 2035, the number of elderly people will reach 30 percent of the total Chinese population. And by 2050, this number could possibly rise to 40 percent.

The CNN report also cites a 2019 report published by government think tank the Chinese Academy of Social Sciences, which claimed China’s state pension fund would be exhausted by 2035 as its workforce shrinks and years of strict pandemic-related restrictions shrink the coffers of local governments.

Last year, many elderly Chinese protested in several major cities against major cuts to their employee medical benefits. At the time, protesters feared the Chinese government was pressuring them to cover shortfalls in the Chinese state pension fund.

In addition, the CNN report also claims that even for those who are still of working age, the job market remains a challenge following the pandemic and government-led industry crackdowns in recent years. According to state media, the youth unemployment rate in China in July this year was 17.1 percent among people aged 16 to 24 and 6.5 percent for people aged 25 to 29.

The report said employers continue to cut back on hiring practices amid the slowdown in the economy and people have witnessed widespread age-based discrimination in hiring for people over the age of 35, particularly in the technology sector.