China is going a step further in doing a raise in retirement age. It is a decision that reflects the China's need to do something for aging population. It is to ensure the sustainability of pension system. Currently, the retirement age in China stands at 60 for men and 50 - 55 for women, which is similar to other countries. But, the China's workforce is in shrinking stage and the elderly population ratio has a rapid increase year by year. Which is one of the major reasons for this act.
This article will explore why China is raising the retirement age by going in depth analysis covering demographic, economic, and social factors behind this decision. And also it's impact on the country's global workflow.
Recent past of Retirement Age in China
China's retirement policy remained unchanged for many decades. During the early years of China's economic reforms, the retirement age was set at 60 for men and 50 - 55 for women. This early retirement age has played a little but important role in transforming from an agrarian economy to an industrial. By opening job opportunities for younger workers
Why China Set a Low Retirement Age in Starting?
- Post revolution employment strategy: The low retirement age helped in redistributing jobs during a time when unemployment was major problem.
- Life expectancy: Life expectancy was lower in the 1950s and 1960s. This made early retirement a more reasonable policy for that time.
Key Reasons of why China is raising the retirement age
Below our some main reasons which we found by analysing the incidents regarding this. In our opinion each reason below have played demanding roles of this raise in retirement age.
1. China's Rapdily aging population
One of the primary reasons for raising the retirement age in China is the country's rapidly aging population. China is experiencing a demographic shift with fewer young people entering the workforce and a large growing number of elderly citizens. Below we have taken some statistics which we found from the internet.
- Aging statistics: By 2035, nearly 300 million people in China or we can say one quarter of the population will be aged 60 and older.
- Low birth rates: Above this by China's one-child policy birth rates are in declining mode. According to the report of news of the China's only 1.3 births is per family.
2. Economic Pressure on China's Pension System
An another factor driving the change is China's pension system. As more people retire more draw in pensions. The fewer working-age with individuals of younge age to contribute to the economy. Below are some statistics :-
- Pension shortfall: By 2050, China's pension system could face a $118 trillion stop one by opening up job opportunities for younger workers if no reforms are made.
- Unsustainable payments: Raising the retirement age will reduce the number of retires pensions draws while increasing contributions from workers staying longer in the workforce.
3. Labor Market Challenges Due to Aging Workforce
The labor market in China is also under pressure due to the decline in the working age population. The shift base is on knowledge based industries means that experienced workers are more valuable than ever before. According to the Reports :-
- Labor shortages: China is already facing shortages in main sectors. Especially in areas requiring skilled labor, such as technology and healthcare.
- Retaining skilled workers: By raising the retirement age, China can retain its most skilled and experienced workers which will increase productivity in industries..
Maintaining Global Competitiveness
China's global economic standing stands heavily on a high and productive workforce. For competing world economy, retaining more workers for longer can help China maintain its competitive edge.
- Competing with other nations: Countries such as Japan, France, and the United States have also raised their retirement ages to scope with similar challenges.
5. Health Improvements
In addition to demographic and economic pressures, life expectancy in China has significantly increased over the past several decades.
- Life expectancy statistics: In 2020, life expectancy in China was 77.3 years.
- Healthier aging population: Because pf better healthcare, many elderly citizens are healthier and more capable of working past the traditional retirement age.
Challenges and Public Opinion
While raising the retirement age in China is largely seen as a decision not without controversy.
- Thoughts of older workers: Many fear that extended working years could lead to mental and physical exhaustion.
- Job competition for younger workers: Younger generations worry that fewer retirees will expose fewer job openings, leading to higher youth unemployment.
How China's Retirement Age compared to Other Countries
To understand the global context, it's useful to compare China's new retirement policy with other countries that have faced similar challenges. We are gone with some of them below.
- Japan: Japan raised its retirement age to 65 and is now working toward raising it to 70.
- France: France raised the retirement age from 60 to 62 and may raise it further in the future.
- United States: The U.S. increased the full retirement age from 65 to 67, depending on birth year.
The Future Impact of China's Retirement Age Policy
China's decision to raise the retirement age is a critical move to address the country's aging population, economic challenges, and labor shortages. By extending the working years, here are few points which China hopes to:
- Boost productivity in key sectors.
- Reduce pension system strain.
- Retain experienced workers to maintain global competitiveness.
At the end we can say this policy change is for to shape the future of China's economy and society.
Our Thoughts
Our thoughts regarding of raising the retirement age are mixed. As populations age globally, countries around the world face similar questions about pension sustainability, workforce management, and the well being of retirees. It's crucial to consider how policy changes, like this how it will affect future generations worldwide.
add your comment