China has announced its plan to gradually increase the statutory retirement age, which is currently among the lowest in the world. This decision is prompted by the need to alleviate the escalating strain on pension funds, as many provinces are already experiencing shortfalls. The reform is deemed necessary due to the significant increase in life expectancy in China, which will reach 78 years by 2021, surpassing that of the United States. The policy document released on Sunday also includes strategies to address the declining birth rate and the aging population, which has decreased for the second consecutive year in 2023 and is expected to continue falling for decades.

The authorities plan to raise the retirement age gradually, with reforms to be completed by 2029. Men currently retire at 60, women in white-collar jobs at 55, and factory workers at 50, with new provisions allowing workers to continue beyond these ages. The aging population is expected to grow substantially by 2035, a trend seen globally that prompts retirement age increases to safeguard pension funds. Michael Herrmann, a senior adviser at the United Nations Development Population Fund, stresses the importance of implementing these changes with flexibility, including options like part-time or remote work. China’s pension system, reliant on a shrinking workforce, is deemed unsustainable. Eleven provinces are already facing pension deficits, and experts predict the system could be depleted by 2035, highlighting the urgent need for reform.