China will gradually increase the retirement age to reduce the pressure on the pension system

China will gradually raise the retirement age, currently the lowest in the world, so that people can work longer and reduce the growing pressure on the pension system, as many provinces are already facing deficits.

The reform is urgent, given that life expectancy in China has increased from about 44 years in 1960 to 78 years in 2021, surpassing that of the United States, and is expected to exceed 80 years by 2050.

“In accordance with the principle of voluntary participation, with appropriate flexibility, we will launch reforms to gradually increase the legal retirement age in a cautious and orderly manner,” Chinese authorities announced on Sunday, presenting a document that also includes plans to combat the declining birth rate.

The planned reforms are expected to be completed by 2029, the announcement mentioned.

Currently, in China, the retirement age is 60 for men—5-6 years lower than in most developed economies—55 for women in office jobs, and 50 for those working in factories.

National health authorities expect that by 2035, the number of people aged at least 60 in China will increase from the current 280 million to over 400 million, equivalent to the entire current populations of the UK and the USA combined.

At present, one Chinese pensioner is supported by the contributions of five workers, with the trend expected to reach 4 to 1 by 2030 and 2 to 1 by 2050, and the Chinese Academy of Sciences estimates that by 2035 the country’s pension system will run out of money.

Most countries have increased the retirement age in response to demographic pressures to save pension funds and slow a potential decline in the labor force, noted Michael Hermann, senior adviser at the UN Population Fund.