“In full payment of 15 years of social insurance but being told that 20 years are needed to receive retirement pension. The delay in retirement has too many pitfalls, I have decided to opt out!” One mainland internet celebrity expressed angrily towards the authorities’ introduction of the delayed retirement policy.
Although the Chinese Communist Party has officially announced that this policy will be gradually implemented starting from next year, the public outcry it has caused is still ongoing. Particularly under the pressure of economic and living conditions, many post-80s and post-90s generations have begun choosing to opt out of social insurance, leading to a wave of opting out. Some analysts believe that due to the severe insufficiency of the social insurance fund, if the pressure brought by the wave of opting out is significant enough, it is highly possible for the leader of the CCP, Xi Jinping, known for his characteristic traits, to compromise. Just like the sudden end of the ‘zero out’ policy under pressure during the ‘blank sheet movement’.
On September 19, the State Council of the CCP officially announced the postponement of the statutory retirement age from New Year’s Day 2025. This policy increases the difficulty of receiving retirement pensions from two aspects: first, gradually raising the statutory retirement age for men from the original 60 to 63; and for women, the original retirement age of 50 for workers and 55 for cadres is postponed to 55 and 58, respectively. Second, starting from January 1, 2030, the minimum payment period for monthly basic old-age pension will be gradually increased from 15 years to 20 years, with an increase of 6 months each year.
Since this policy was announced by the NPC on September 13, there has been no formal solicitation of opinions from the public. The release of the related policy immediately ignited a fierce public backlash, with related topics continuing to trend on Weibo. Among them, a post titled ‘Three Questions of the Soul’ reveals the pressures and hardships faced by the Chinese people in paying social insurance under the economic environment of many companies going bankrupt and high unemployment rates among young people.
The post asks, “Can you live to retirement? Can the company survive until you retire? Can the company let you work until retirement?” This content has resonated with the public and has been widely shared online.
Simultaneously with the eruption of public grievances, a wave of opting out has emerged in various regions, with many participants being from the post-80s and post-90s generations. A Beijing internet celebrity, ‘Beitong’, stated in a video, “As a post-80s, I have carefully calculated and paid social insurance for 15 years and two months, meeting the minimum requirements to receive retirement pensions, but now that the terms have been changed, I have decided not to continue paying.”
When asked why not endure for another 5 years, he explained, “15 years was the promise given to our generation, and now suddenly changing it to 20 years, will it change to 25 or 30 years in the future? Many people are engaged in physical labor; having to wait until 63 to receive retirement pensions is extremely unfair compared to their average lifespan.”
He also stated that the policy of delaying retirement has many pitfalls, and cited an online comment saying, “It’s foolish to discuss benefits with someone or an organization that lacks a sense of contract. The only thing to do is to stop the loss in time.”
A woman named ‘Chen Chen’ in Harbin, who identifies as a post-70s flexible worker (unemployed, relying on various short-term jobs), expressed her anger in a video, saying, “I once bet that you (the CCP government) could fully support me, but instead, you want to prevent me from receiving money, it’s simply shameless!”
“Chen Chen” explained that she earns over 3,000 yuan (about 428 dollars) per month, and pays about 1,600 yuan (about 228 dollars) monthly for social insurance and health insurance, quickly approaching 20 years of payments. She ironically commented that she has ‘boarded the thief’s ship and cannot get off’, and she plans to stop paying immediately once she reaches the 20-year mark. She also suggested that friends and relatives who have only paid for over a decade should ‘opt out immediately to stop the loss’ because the authorities have broken the contract and turned it into a scam.
In recent years, China’s economy has been declining, the unemployment rate has been rising, and the so-called flexible workforce has reached 200 million. According to a 2022 report on China’s gig economy, many young people under the age of 30 are facing job difficulties and have to enter the gig market, taking up jobs such as ‘day laborers’, ‘hourly workers’, and ‘interns’. The proportion of flexible employment in first-tier cities in China has reached 25.6%; by 2036, the flexible workforce in China may reach 400 million.
A YouTube channel focusing on the livelihood of China, ‘Undisclosed China’, released a video on September 22 showing a long queue inside a local social security bureau, filled with people. Many of those in line were inquiring about social insurance-related matters, and many took the step to opt-out at that time.
The channel also featured voices of several opt-out individuals, including a 32-year-old white-collar worker in Shanghai who stated, “Breaking taxes and benefits, this is the most important decision in my 32 years.” She explained that she had worked for over ten years in a well-known internet company, paying personal income tax and social insurance public funds for more than a decade, but now that the social insurance payment period has been extended from 15 years to 20 years, and with an unexpected setback in her career, she has decided to return home and take a break.
North American investment advisor Mike Sun, in an interview with the Epoch Times, stated that China is facing severe aging of the population, a decreasing population, a severe shortage of social insurance funds, and significant financial pressure on local governments, which forced them to implement the delayed retirement pension policy forcibly. Thus, the long-planned policy of postponing the payment of retirement pensions was put on the table.
The idea of postponing the retirement age was first proposed by Chinese Communist scholars in 2004, and the social insurance sector followed suit. By 2012, the CCP officially stated that “postponing the retirement age is an inevitable trend”. However, after numerous investigations by the media, it was found that over 70% of the population, with the majority at 90%, opposed this idea. Despite the authorities repeatedly probing the public sentiment, ultimately, the policy was not implemented.
Postponing retirement is one of the measures adopted by many European and American countries to solve labor shortages or ease the pressure on social insurance. However, it has not been met with the strong opposition seen in China. An old article from a CCP official media outlet mentioned the reason behind this.
In 2013, an article entitled “Postponing retirement may constitute a breach of contract for a generation” was published by the CCP official newspaper, ‘China Youth Daily’, suggesting that if the government intends to delay retirement age, it should first “eliminate the dual-track pension system in the pension system before discussing delayed retirement age; first increase government investment before discussing public responsibility. Equity should come first, then efficiency.”
This article was widely shared under the current public opinion against the postponed retirement policy but was quickly censored. However, on September 18, the official website of Chengwu County, Shandong Province, released the “Chengwu County 2023 National Economic and Social Development Statistical Bulletin,” inadvertently revealing a severe disparity in pension benefits under a different ‘dual-track’ system within and outside the CCP system.
The report showed that in 2023, there were 8,778 retired personnel from government institutions (within the CCP system) receiving 785 million yuan in pension benefits (about 111 million US dollars); 13,220 retired personnel from enterprise units receiving 369 million yuan in pension benefits (about 52.48 million US dollars); and 119,400 rural and urban residents receiving 251 million yuan in pension benefits (about 35.7 million US dollars).
Based on the data above, the average pension per person in the county within the CCP system was 7,452 yuan per month (about 1,060 US dollars per month), which is 3.2 times that of retired personnel from enterprise units (2,326 yuan per month, about 330 US dollars per month), and 43 times that of urban and rural residents (175 yuan per month, about 25 US dollars per month).
This example from the county may reflect the harsh reality of the ‘dual-track’ retirement pension system implemented by the CCP government.
In the past two months, the CCP has successively introduced policy measures such as online identity verification (July 26), housing retirement pension insurance system (August 23), and delayed retirement age (September 13), which have been accused of aiming to control public speech more strictly and further ‘pluck the leek’, leading to strong public opposition. Both the online identity verification and housing retirement pension insurance system quickly fell through, with authorities stating that they will not be implemented for the time being.
Whether the wave of opting out caused by the delayed retirement age will result in a collapse is now under scrutiny. Mike believes that it cannot be ruled out, and the key point lies in determining the pressure brought by the wave of opting out, much like the pressure on banks brought by the wave of mortgage defaults. He said, “China’s social insurance fund is severely inadequate, so once the social insurance fund is cut off, the entire social insurance system will halt, with massive implications. If the wave of opting out brings such pressure, it will force the authorities to reassess the relevant measures. In fact, the emphasis on ‘gradually’ implementing the policy should be seen as a way out in unforeseen circumstances.”
Mike also noted, “Xi Jinping has a characteristic trait that when faced with strong resistance affecting his regime, he has softened numerous times. The ‘blank sheet movement’ outbreak previously led to an overnight abandonment of the clear-zero control policy he had enforced.”