After decades of discussions and considerations, China is approaching the implementation of a significant reform of its pension system, including raising retirement age. This step has significant consequences for more than 500 million workers in a country that faces serious demographic challenges.
The number of people aged 60 or more in China increased from 126 million in 2000 to 297 million in 2023. This increase has doubled their share in the country's total population. The aging of the population is the result of a long policy of one child who has been in effect by 2015, as well as a decrease in birth rates in recent years.
The situation worsens due to a record low birth rate. In 2023, the number of newborns in China fell to 9.02 million, which is the lowest in the history of observations. This has led to India bypassing China as the most densely populated country in the world. Reducing the population and reducing labor creates serious problems for the country's pension system.
In the context of the aging of the population and the decline in fertility, China's pension funds are under great pressure. According to several research institutions, the main pension funds of the country covering city workers can run out in about ten years. This threatens serious financial difficulties for many pensioners and increases the risk of economic and social instability.
To solve these problems, the Chinese government plans to raise retirement age. Changes involve a gradual increase in the age of retirement, which will reduce the load on the pension fund and ensure greater stability of the system. The reform is also aimed at helping to keep more people in their work strength, which is critical in the face of a decrease in the population of working age.
Raising retirement age can affect many employees who have hoped for early retirement. This decision can cause social dissatisfaction and protest sentiment among the older generation, which has already planned their retirement. However, the government expects that this reform will help maintain economic stability and ensure the future of pension payments.
