The Standing Committee of the National People’s Congress of the Chinese Communist Party (CCP) has reviewed the proposal for “progressive postponement of the statutory retirement age” this week. Officially, this is seen as a necessary choice in response to the aging population. Although China is one of the countries with the lowest retirement age in the world, public skepticism about postponing retirement seems to be prevalent. Experts believe that the CCP’s move to delay retirement is primarily driven by economic considerations and related to fiscal pressures, with the aim of squeezing individual productivity.
In addition, the authorities have avoided discussing past family planning policies that led to aging and the shortfall in pension funds. Some analysts believe that by transferring some state-owned assets to bolster social security funds for universal retirement benefits, the pension gap could be resolved. However, the CCP has consistently refused to do so, which is seen as a key issue.
According to a report by the CCP’s official Xinhua News Agency, the National People’s Congress held a plenary meeting in Beijing on Tuesday (September 10) to discuss the proposal on “implementing a progressive postponement of the statutory retirement age.” Authorities had previously indicated that the statutory retirement age would be gradually raised.
Currently, the statutory retirement age for men in China is 60, which is about 6 years lower than in most developed economies, while female cadres retire at 55 and female workers at 50. Meanwhile, the population of working-age individuals aged 16 to 59 continues to decline, while the number of elders aged 60 and above keeps rising.
CCP’s official media has been publishing expert interviews advocating for the “progressive postponement of retirement.” The reasoning behind postponing retirement, as interpreted by the “Xinhua Viewpoint,” includes factors such as aging population, increased life expectancy in China (average life expectancy reaching 78.6 years), and improved labor quality combined with decreased labor force quantity.
Mo Rong, the director of the China Labor and Social Security Institute, claims that delaying retirement is a proactive response to population aging, aiding in the full utilization of human resources. Zhao Zhong, the dean of the School of Labor and Human Resources at Renmin University of China, suggests that the higher life expectancy means the age at which individuals can continue engaging in productive activities has increased.
However, the discussion of postponing the statutory retirement age in the NPC agenda has sparked backlash on mainland social media, with many expressing concerns.
On the withdrawal platform, a netizen commented, “When the authorities hinted at delaying retirement, the reasons given were about the US, Japan, the UK, France, and Germany, all retiring at 65, some even implementing it for over a decade, to align with international standards. It’s true that they retire at 65, and it has been in place for quite a while, but they never mention labor guarantees, labor law enforcement, pension levels, or labor protection like we do!”
Another netizen replied, “When companies have diversified pension plans, have they improved their basic social security and welfare? Do they have the same fake attendance system, medical standards, or working environment?”
Continuing, a review on Weibo related to recent news and topics found little support among netizens for delaying retirement. The Beijing Daily republished an article from Xinhua News Agency titled “Experts: Delaying retirement is a significant reform in response to population aging,” followed by a limitation on reader comments.
A mainland worker named Sondy (pseudonym) working in a public institution in China told Dajiyuan that the retirement age in China is earlier than many countries in Europe and the United States. He believes that this policy, if implemented, will lead to more middle-aged and elderly people occupying job positions, exacerbating the challenges faced by young people in finding employment.
Independent scholar Yang Bing (pseudonym) stated that without adequate equal employment and fair retirement benefits, implementing the so-called delay in retirement would inevitably intensify unhealthy competition among laborers. The labor-capital conflict becomes harder to resolve, and foreign private enterprises will struggle to recover, relying solely on state-owned enterprises for job creation, while people are left to do delivery work, pushing their physical limits and facing a more difficult survival scenario.
Former university teacher Gu Guoping from Shanghai told Dajiyuan that the previous retirement system had some shortcomings. For instance, the retirement age of women at 50 seemed a bit early, and delaying it to 55 or even longer would be more realistic and scientific. However, for men, delaying retirement from age 60 to 65 does not align with China’s current demographic characteristics as women tend to have longer lifespans compared to men.
He believes that discussing delaying retirement is not the main issue; the main problem lies in the fact that the National People’s Congress is merely a rubber stamp, shaping laws that do not represent the grassroots or public opinion, lacking legitimacy. “Policies formulated by these closed-door expert committees are unlikely to reflect the objective reality and are unscientific.”
American economist David Huang told Dajiyuan that China’s current retirement age is much earlier compared to Western countries, but retirement mechanisms in developed countries like Europe and America are more equitable, providing more reasonable and higher pension benefits.
“Compared to developed countries in Europe and America, the welfare of the common people in China does not match their contributions. The major issue is the stark difference between labor protections in China and Western countries, where China’s medical and work injury compensation are significantly lower, with a different approach to verification and safeguarding of rights.”
Huang explained that civil servants and privileged classes holding official positions do not wish to retire, especially considering the aging population. Following this, public officials and state-enterprise workers pay very little towards their pensions but enjoy a significant portion of retirement and medical benefits. With the current shortfall in social security, these groups eat away at the future of society.
According to Huang, one of the true motivations behind Beijing’s adoption of a delayed retirement policy is to stabilize the current government workforce. Another reason is the urgent need to address the pension deficit.
“The large imbalance in social security and medical funding leads to postponing retirement, allowing more people to continue contributing, thus reducing the number of pension beneficiaries. This addresses the most pressing concerns.”
Thirdly, Huang emphasized that the CCP’s approach is purely economic. Just like the one-child policy, individuals are viewed as a means to extract productivity for the society, extending their working years. While this strategy may benefit the economy, it presents a tragedy for individuals.
In population economics, individuals aged 16 to 59 constitute the core working-age population responsible for social production. According to data from China’s National Bureau of Statistics, as of the end of 2023, China’s working-age population stood at approximately 860 million, accounting for 61.3% of the total population.
It is worth noting that in early 2023, the popular Chinese internet term “human ore” was used to describe people being treated as expendable commodities by the CCP for exploitation. The term quickly gained traction online but was swiftly censored by authorities, now classified as a “sensitive term.”
CCP media often emphasizes the aging population when interpreting the delayed retirement, asserting it as a “necessary choice.”
Data from the CCP’s Ministry of Civil Affairs shows that by the end of 2023, China’s elderly population aged 60 and above had reached 297 million, accounting for 21.1%, while those aged 65 and above numbered 217 million, making up 15.4%, marking the country’s transition to a moderately aging society.
The National Health Commission of the CCP estimates that by 2035, the population aged 60 and above will increase from 280 million to over 400 million. Currently, one retiree’s pension is funded by contributions from five active laborers, only half of what it was a decade ago, expected to decrease to four to one by 2030 and two to one by 2050.
Xu Zhen, a veteran in China’s capital market, informed Dajiyuan that the CCP’s officials have avoided mentioning the drastic population decline caused by the inhumane family planning policies of the past years, which resulted in the rapid emergence of an aging society in a fast-developing economy.
According to the “China Health Statistics Yearbook 2010,” China recorded at least 13 million cases of induced abortions annually, as per official CCP data. However, according to US State Department figures, China conducts 23 million abortions each year.
On September 11, Lin Caiyi, a renowned mainland economist residing in Shanghai, raised concerns on Weibo. “What should we do after postponing retirement? I see a lot of recently retired or soon-to-retire friends making travel and leisure plans enthusiastically, but deep down, one can’t help but worry: given the current pace of aging and the declining economic cycle, can you guarantee receiving sufficient pension three to five years from now?”
The article noted recent downsizing in the financial sector and layoffs in foreign and private enterprises. “If the government cannot even pay civil servants’ salaries, who can ensure that retired individuals will receive full pension benefits to enjoy their later years? The core of the policy of postponed retirement is delaying the age of pension reception, indicating that there is a shortfall in social security funds… Solutions proposed: 1. Delay receiving pensions for those eligible; 2. Apply a discount to already retired individuals. Measure 1 has been activated, how far is Measure 2?”
The official promotion of delaying retirement sidesteps addressing the specific shortfalls in social security funds, especially the pensions themselves.
In the “China Pension Development Report 2016” released at the end of 2016, it was highlighted that the cumulative recorded balance in the basic pension accounts of workers reached 4.7 trillion yuan, but the balance in the pension funds was only 3.5 trillion yuan. This pension deficit amounted to 1.2 trillion yuan.
According to the “China Pension Actuarial Report 2019-2050” published by the Chinese Academy of Social Sciences, the outlook for pension funds is concerning. After peaking at 699 billion yuan in 2027, pension funds are expected to decline annually and be depleted by 2035.
The balance of China’s social security pension funds is largely dependent on the proportion of elderly people compared to the total population and the number of retirees. Xu Zhen explained that due to historical issues and population aging, the individual accounts of older participants are insufficient, forcing funds from younger contributors to sustain current pension payouts, resulting in deficits in personal accounts and accumulating implicit debts for the government.
“Due to the increasing number of pension beneficiaries and a decreasing pool of contributors, by 2035, not only will the national pension funds run dry, but the hidden debt crisis in personal accounts will also explode.”
Extending people’s working years may alleviate some pressure on pension budgets, but Xu Zhen asserts that the CCP’s push for delayed retirement does not fundamentally solve the issue of diminishing pension balances. The key problem lies in the abandoned approach to resolving the national pension problem, indicating the crux of the matter.
Xu Zhen elucidated that over twenty years ago, economists like Wu Jinglian proposed transferring a portion of state-owned assets to bolster social security funds for universal retirement benefits, reflecting the public nature of these capital assets. “Transferring 10% of state capital equity, about 9 trillion yuan, could address the operational issues with empty individual pension accounts, but the CCP has not adopted this, revealing a lack of genuine intent to resolve the national retirement predicament and rather seeking to continue ‘harvesting the leeks.'”