China Making Changes to Retirement Ages do to Cost

IN THE 1950s, when China’s civil war was only just over and life expectancy still below 45, setting a relatively young retirement age seemed sensible to China’s new Communist Party rulers. But 60 years on, a recent study showed the nationwide average age of retirement is still 53 even though the economy is transformed and the average life expectancy is now 75. With the number of pensioners set to soar, and the number of young workers able to support them unable to keep up, China has been making long-overdue changes at both ends of the demographic spectrum. Late last year it started to ease its restrictive one-child policy. Now it is planning an adjustment to the retirement age.

Allowing people to choose if they want more than one child may prove more popular, but raising the retirement age is likely to bring more economic benefits. Officials at China’s Ministry of Human Resources and Social Security (MHRSS) have solicited advice from Chinese and foreign experts, including the World Bank and the International Labour Organisation. Many have advised raising standard retirement ages—currently 50 or 55 for women and 60 for men—by five years each.

The government has clearly signalled its intention to follow this advice. In October an MHRSS official openly supported the idea, and in November, an important meeting of senior party leaders included three “gradual” adjustments in retirement age in its official policy document. State media recently quoted a World Bank official saying the current arrangement is “not sustainable” and an MHRSS official has told Hong Kong media that adjustments are “inevitable”. As always, caution is the watchword. Yin Weimin, the MHRSS minister, said last month that officials mean to raise the retirement age and “will definitely introduce the plan before 2020”.

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