China Plans to Raise Retirement Age Amid Economic Challenges
On Friday, the Chinese government announced a new plan to increase the retirement age for employees. This plan will be implemented over 15 years, starting from January 2025. The decision comes as China faces a shrinking workforce, a declining economy, and a pension funding crisis for its elderly citizens.
According to the new rules, the retirement age will gradually increase to 63 years for men and from 55 to 58 years for women, depending on their occupation. Previously, men could retire at 60, and women at 50 or 55, based on their job roles. The government also plans to extend the minimum working period required to receive a monthly pension from 15 to 20 years by 2030.
This move has sparked significant backlash on social media, with many citizens claiming it is a tactic to delay their access to pensions amid high youth unemployment rates. In July, the youth unemployment rate in China was 17.1% for those aged 16 to 24 and 6.5% for those aged 25 to 29.
China’s elderly population, which currently makes up more than 20% of the total population, is expected to grow to 30% by 2030-2035 and could reach 40% by 2050. A 2019 report by the Chinese Academy of Social Sciences warned that the state pension fund could run out by 2035 due to the shrinking workforce and economic challenges.
Last year, elderly citizens protested in major cities over cuts to their medical benefits, fearing the government was pushing them to cover pension fund shortages. The employment market remains challenging, especially for those over 35, as employers pull back on hiring amid the slowing economy.
Doubts Revealed
Retirement Age -: Retirement age is the age at which a person stops working and starts receiving a pension. In China, they are planning to make people work longer before they can retire.
Economic Challenges -: Economic challenges are problems that affect a country’s economy, like not having enough money or jobs. China is facing such problems and is trying to fix them by changing the retirement age.
Pension -: A pension is money that people get regularly after they retire from work. It helps them live comfortably when they are no longer earning a salary.
Shrinking Workforce -: A shrinking workforce means that there are fewer people working. This can happen if more people retire or if fewer young people are available to work.
Pension Funding Crisis -: A pension funding crisis happens when there isn’t enough money to pay for everyone’s pensions. This can be a big problem for retired people who depend on that money.
Backlash -: Backlash means a strong negative reaction from people. In this case, many citizens in China are unhappy with the plan to raise the retirement age.
Minimum Working Period -: The minimum working period is the least amount of time someone needs to work to be eligible for a pension. China plans to increase this period from 15 to 20 years by 2030.