China will progressively raise the statutory retirement age starting from 1 January 2025, marking the country's first such adjustment since the 1950s. Chinese lawmakers voted on the decision at the 11th session of the Standing Committee of the 14th National People's Congress on 13 September. The retirement age will be increased by up to five years over a 15-year period to address China's shrinking workforce and ageing population.

Background

The decision to raise the retirement age comes as China faces a declining working population and increasing life expectancy, which is expected to surpass 80 years by 2050. The current retirement ages in China are among the lowest in the world, and the adjustment aims to refine the old-age insurance incentive mechanism, implement an employment-first strategy, and improve elderly care and childcare services.

Increase to retirement age and minimum year of basic pension contributions

According to Xinhua, the retirement age for men will be raised progressively from 60 to 63 over 15 years starting in 2025. For women cadres and blue-collar workers, the retirement age will be increased from 55 to 58 and from 50 to 55, respectively. Additionally, the government will raise the minimum years of basic pension contributions required to receive monthly benefits from 15 years to 20 years starting in 2030, with an increment of six months each year.

Those wishing to retire earlier can do so up to three years before reaching the minimum required years of pension contributions, but not earlier than the previous statutory age. Under the new law, individuals may also postpone retirement within three years based on a mutual agreement with their employers.

Shrinking workforce

China's adjustment of the retirement age is driven by its shrinking workforce and increasing life expectancy. The country is grappling with a declining working population needed to support the elderly. The move also aims to ensure the basic rights and interests of workers who have passed their statutory retirement age. The decision was based on a comprehensive assessment of health conditions, population structure, education levels, and workforce supply in China.

Future implications

The gradual increase in the retirement age is expected to have significant implications for China's workforce and economy. By extending the working years, the government hopes to alleviate the pressure on the pension system and ensure sustainable support for the ageing population. This policy change reflects a broader strategy to adapt to demographic shifts and maintain economic stability in the face of an ageing society.