China has announced its first increase in the retirement age since the 1950s

China will "gradually raise" its retirement age for the first time since the 1950s, in response to an aging population and a shrinking pension fund. On Friday, the top legislative body approved new proposals that will increase the statutory retirement age: from 50 to 55 for women in blue-collar jobs, from 55 to 58 for women in white-collar jobs, and from 60 to 63 for men.

The changes will take effect on January 1, 2025, with incremental increases over the next 15 years. Early retirement will no longer be permitted, though individuals can delay retirement by up to three years. Starting in 2030, employees will need to contribute more to the social security system to qualify for pensions, with a requirement of 20 years of contributions by 2039.

This decision comes amid concerns about China's pension fund potentially running out by 2035, an estimate made before the economic impacts of the COVID-19 pandemic were fully realized. The plan is based on a comprehensive assessment of various factors, including life expectancy, health conditions, population structure, education levels, and workforce supply.

The announcement has sparked mixed reactions online. Some express skepticism and frustration, while others anticipated the change, noting that retirement ages in many European countries are already higher.

China is facing a demographic crisis as its population declines for a second consecutive year, with a birth rate that continues to fall. The average life expectancy has risen to 78.2 years, and by 2040, about one-third of China's population is expected to be over 60, up from 254 million in 2019.

This demographic shift, coupled with a slowing economy and the legacy of a decades-long one-child policy, has led to significant concerns about the sustainability of China's pension system and its ability to support a growing elderly population.