Explainer: How to understand China’s draft decision on gradually raising statutory retirement age

BEIJING, Sept. 10 (Xinhua) — The 11th session of the 14th National People’s Congress (NPC) Standing Committee on Tuesday reviewed a draft decision on gradually raising the statutory retirement age in China.
Experts have explained to Xinhua why the retirement age needs to be raised and whether it would affect employment.
“Delaying retirement is a major reform introduced in response to population aging, and is conducive to the full utilization of China’s human resources,” said Mo Rong, head of the Chinese Academy of Labor and Social Security.
Currently, the retirement age in China for men is 60, while it is 55 for women cadres and 50 for women blue-collar workers.
“The arrangement was made based on average life expectancy, working conditions and employment practices in the 1950s. Now more than 70 years have passed and profound changes have taken place in average life expectancy, years of schooling, population structure, and relationship between labor supply and demand,” Mo said, adding that it is necessary to raise the retirement age accordingly.
Compared with the early years of the People’s Republic of China, the average life expectancy has increased from around 40 years to the current 78.6 years. There has been a significant increase in the number of years of education and a prominent delay in the age at which people join the workforce.
On the other hand, China’s population of working-age individuals, aged 16 to 59, has been constantly declining, while the legion of people aged 60 and above keeps growing.
“The deeper-seated significance of delaying retirement lies in optimizing the allocation of human resources and enhancing the flexibility and efficiency in the labor market,” said Yuan Xin, vice president of the China Population Association and a professor at Nankai University.
Experts also shared their thoughts on whether delayed retirement would make it harder for young and middle-aged people to get employed.
“A fundamental principle of public policy adjustments is to minimize social impact and fluctuations. It also applies to delaying retirement,” Yuan said.
“A gradual approach (to raising the retirement age) means that the scale of workforce released to society in the short term would not be too large, and thus the overall impact on the job market would be limited,” he said.
“From the perspective of supply in the human resources market, allowing elderly individuals with willingness and ability to continue working can partially offset the decline in the working-age population,” said Dong Keyong, a professor with Renmin University of China.
Speaking of employment for young people, Dong said that it should mainly rely on the increase in job opportunities generated by economic development.
“There is some overlap between industries favored by young people and older workers, but the degree of overlap is not high. Young people are more inclined to seek employment in sectors such as the internet, digital economy and emerging industries,” he said.
“To address the issue of employment for middle-aged workers, it is necessary to remove employers’ discrimination against those aged above 35, and create a more equitable employment environment,” Dong said.
China’s Ministry of Human Resources and Social Security has recently rolled out measures to tackle relevant problems, including harsher punishment on employment discrimination and prohibition on setting unreasonable restrictions during recruitment.
“I believe if the decision on raising the retirement age is adopted after deliberation, relevant departments will beef up efforts to promote employment, regulate recruitment practices, and safeguard the rights and interests of workers. They will take more targeted measures to ensure high-quality and full employment,” Yuan said. ■