China’s top lawmakers set to raise retirement age to handle shrinking workforce born of collapsing birthrate

The Standing Committee of the National People’s Congress on Tuesday discussed motions including a draft decision by the State Council, China’s cabinet, to gradually up the retirement age, the official Xinhua News Agency reported without giving details. If approved, it would be the first increase in the retirement age in over 40 years.

The unexpected deliberation followed a July announcement by the ruling Communist Party that the retirement age will rise in a “voluntary, flexible manner.” The proposal wasn’t on the meeting agenda announced ahead of the four-day meeting of the legislative body this week.

The discussion by the top legislative body comes as the country faces demographic headwinds that are weighing on the growth outlook of the world’s second-largest economy. Delaying retirement would slow the decline of its working-age population and buy Beijing more time to boost birth rates that fell to a record last year.

Raising the threshold could “increase the effective supply and utilization of the labor force of the whole society, and maintain the impetus and vitality of economic and social development,” Yuan Xin, an economics professor from Nankai University, told People’s Daily in an article published Wednesday. “In accordance with the principle of voluntariness and flexibility, older people who have the willingness, ability and conditions to continue to work will be able to better realize their own value.”

The proposal will likely be endorsed on Friday when the NPCSC meeting concludes, as the approval of a plan submitted by the State Council is largely a formality. The effective date and other details may follow.

Since at least the 1970s, the retirement age for white-collar workers has been kept at 60 for men and between 50 and 55 for women, putting China at the lower end of the spectrum worldwide. Previous discussions on raising the age, such as in 2008, had failed to reach the legislature.

While generally unwelcome by workers across the world, in China, resistance to the idea has revealed deeper anxieties.

In response to the Tuesday announcement, Chinese social media buzzed with expressions of grievances with the job market, especially for older employees.

“Sure let’s delay retirement,” one user wrote in a popular post on X-like Weibo. “But you have to provide jobs for people aged 35-65.”

China’s labor market remains sluggish amid an economic slowdown. Meanwhile, Chinese companies are infamous for their “996” culture — meaning working from 9 a.m. to 9 p.m. six days a week — and for discrimination against hiring women and people older than 35. The growing use of artificial intelligence also threatens to compete with workers.

Seeking to address age discrimination, officials last month pledged to crack down on hiring biases, including by targeting job ads that contain discriminatory language on gender and age.

China’s population has been in decline since 2022, with people aged 65 and above expected to reach 30% of the population by around 2035 from 14.2% in 2021, according to a report by state broadcaster CCTV on Tuesday. 

What Bloomberg Economics Says…

From a long-term perspective, the move makes sense. It’s the latest step to address a demographic crunch that’s weighing on growth.

From a short-term perspective, though, it risks adding to headwinds to the recovery. With the economy slowing and the job outlook deteriorating for workers still early in their careers, the prospect of having to work further into their older years could put another damper on sentiment — at a time when boosting confidence is key to reviving growth.

Eric Zhu, economist