For the first time, since 1950, China is considering to increase the retirement age within the country, as policy makers have confronted that the prospect of a shrinking workforce that damps economic growth.
The age will rise gradually, Hu Xiaoyi, a vice minister of human resources and social security, said this month. Right now, the compulsory retirement age in China is 50 years for women and for men it is 60 years. From 2020, the retirement age is proposed as five years higher than the present ages.
Delaying retirement may be a more effective tool in alleviating labor shortages and driving growth than the easing of the one-child policy announced last month as part of the broadest policy reforms since the 1990s. More than three decades of population control are thinning the ranks of available workers, adding to constraints on expansion as President Xi Jinping’s government seeks to rein in debt-fueled investment.
Chang Jian, China economist at Barclays Plc in Hong Kong, stated, “I would think that a lot of people would want to voluntarily work longer if the policies are right.” The government would get “a lot more mileage” from raising the retirement age than a partial relaxation of the one-child policy, she said.
Twelve of 18 analysts saw 55 as closest to the 2020 retirement age for women, with five saying 60 and one 65, according to the Bloomberg News survey, conducted from Nov. 22 to Nov. 27.
The retirement age for men is likely to rise to about 65, according to 14 respondents, while two said it would be closer to 70 and two said it would stay near 60, the survey found.
For women in white-collar jobs, the retirement age is 55, and there are other exceptions such as for heavy labor.