With the anticipation of a shrinking workforce in China in the near future as China has experienced declining newborns over the past few years, delaying retirement is expected to become a hot topic during this year's two sessions again as a latest report on the development of China's pension estimated that the age of the postponed retirement can eventually be adjusted to 65.
China has one of the lowest statutory retirement ages among major economies, which allows men to retire at 60, white-collar women at 55 and 50 for women who work in factories, a policy unchanged since the 1950s.
However, Chinese people's average life expectancy has risen from 43.7 years in 1960 to 78.2 years in 2021.
Over the years, Chinese social security experts have warned of the threat from the depleting pension funds due to the longer life expectancy in contrast with the unchanged statutory retirement ages, in addition to the factor of China's declining birth rate.
Statistics of the newborns over the past forty years show that China's birth rate has been declining since reaching its peak in 1987.
At present, each Chinese retiree is supported by the contributions of fewer than five workers. The ratio is half what it was two decades ago and is trending toward 3-to-1 in 2030 and 2-to-1 in 2050.
Demographers and economists have warned that the current pension system, which relies on a shrinking active workforce to pay the pensions of a growing number of retirees, is unsustainable and needs to be reformed.
In terms of estimating the pension replacement rate, the China Pension Report 2023 released by the Social Security Laboratory at Chinese Academy of Social Sciences on December 29, 2023, pointed out that the introduction of a delayed retirement policy is imminent and the eventual statutory retirement age after the adjustment might be 65.
