China prepares to raise retirement age by five years

China is on the brink of a major policy shift as the government prepares to gradually raise the retirement age by about five years. This policy change is set to impact more than 500 million workers across China. Currently, China has one of the lowest retirement ages globally, set at 60 for men and 55 for women. With an average life expectancy of around 79 years, the Chinese spend, on average, nearly 20 years in retirement under the current system. In contrast, countries like Australia and Iceland have the highest retirement ages in the world, both set at 67 years. With an average life expectancy of around 83 years, people in these countries typically spend about 16 years in retirement. China's relatively longer retirement period underscores the urgent need for reform to align with global standards and ensure the sustainability of its pension system. As the world's second-most populous country, China faces a critical demographic issue, with record-low birth rates and a declining working-age population. In 2023, the working-age population fell to 61.3%, down from 62% in 2022. The number of people aged 60 and older in China has nearly tripled from the year 2000 to almost 300-million in 2023. This rapid increase is raising concerns about increasing pressure on the work-force. And according to the International Monetary Fund, the number of working-age Chinese will shrink by about 170 million over the next 30 years, while the 65 and over population will surge to nearly 380 million. Raising the retirement age could provide a much-needed relief to the economy.