China Approves Plan to Increase Retirement Age Starting January 2025, According to Reuters

By Farah Master

HONG KONG – China’s top legislative body has given the green light to a proposal to increase the nation’s retirement age, as reported by the official Xinhua news agency on Friday. This move is a part of broader reforms aimed at addressing the economic challenges posed by a declining workforce.

Currently, China’s retirement ages are among the lowest in the world. The need for reform is pressing, as life expectancy in China has risen significantly from about 44 years in 1960 to 78 years in 2021, with projections suggesting it could surpass 80 years by 2050. Meanwhile, the shrinking working population required to support the elderly is becoming an increasing concern.

Under the proposed changes, the retirement age for men will rise from 60 to 63 years. For women in white-collar positions, the age will increase from 55 to 58 years, while for those in blue-collar jobs, it will rise from 50 to 55 years. The new regulations are set to take effect on January 1, 2025, and will be rolled out over a period of 15 years.

Extending the working age could alleviate some financial strains on pension budgets, which are currently facing significant deficits in many provinces. Nevertheless, the prospect of delaying pension payouts and requiring older individuals to remain in the workforce may not resonate positively with everyone.

Following discussions among top lawmakers on September 10, a substantial number of people took to social media to express concerns about the potential increase in job seekers competing for limited positions.

By raising the retirement age, the government aims to improve labor force participation, which could help offset the negative impacts of an aging population. According to Xiujian Peng, a senior research fellow at the Centre of Policy Studies in Australia, action is necessary; continued population decline could accelerate labor force shrinkage and hinder economic growth.

Xing Zhaopeng, a senior strategist with ANZ, noted that while this change may not have an immediate impact, it is likely to contribute to sustained productivity growth over the long term.

Wang Xiaoping, Minister of Human Resources and Social Security, clarified that the increase in retirement age would be gradual and flexible, allowing workers the option to retire earlier or to extend their careers by up to three years.

The current retirement system has resulted in an increasing number of retirees alongside a shrinking pool of active workers. Authorities project that the number of individuals aged 60 and older in China will grow from 280 million to over 400 million by 2035—equating to the combined populations of Britain and the United States.

Data from the finance ministry indicates that 11 out of China’s 31 provincial-level jurisdictions are managing pension budget deficits. The state-run Chinese Academy of Sciences warns that without further reform, the pension system could face insolvency by 2035.

This reform aligns China more closely with regional peers like Japan, where pensions are available from age 65, and South Korea, where the age is 63.