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An elderly couple at a retirement community on the outskirts of Shanghai. (Bloomberg) |
China plans to raise the retirement age for the first time since the 1950s, as policy makers confront the prospect of a shrinking workforce that damps economic growth.
The age will rise gradually, Hu Xiaoyi, a vice minister of human resources and social security, said this month. China’s compulsory retirement ages, now 50 for most women and 60 for men, are likely in 2020 to be about five years higher than they are now, according to economists surveyed by Bloomberg News.
Delaying retirement may be a more effective tool in alleviating labor shortages and driving growth than the easing of the one-child policy announced last month as part of the broadest policy reforms since the 1990s. More than three decades of population control are thinning the ranks of available workers, adding to constraints on expansion as President Xi Jinping’s government seeks to rein in debt-fueled investment.
“I would think that a lot of people would want to voluntarily work longer if the policies are right,” said Chang Jian, China economist at Barclays Plc in Hong Kong, who formerly worked at the World Bank. The government would get “a lot more mileage” from raising the retirement age than a partial relaxation of the one-child policy, she said.
Twelve of 18 analysts saw 55 as closest to the 2020 retirement age for women, with five saying 60 and one 65, according to the Bloomberg News survey, conducted from Nov. 22 to Nov. 27.
The retirement age for men is likely to rise to about 65, according to 14 respondents, while two said it would be closer to 70 and two said it would stay near 60, the survey found.
For women in white-collar jobs, the retirement age is 55, and there are other exceptions such as for heavy labor.
The working-age labor force in China declined by 3.45 million people last year, according to the government. The United Nations has forecast a drop of about 24 million in the population age 15 to 59 from 2015 to 2025, while people age 65 and older will increase by about 66 million.
Scarcity is helping push up labor costs, driving companies such as Samsung Electronics Co. to relocate production to countries including Vietnam.
Raising the male retirement to 65 by 2020 may help keep in the labor force some of what statistics-bureau data show were 41.5 million men age 47 to 51 in 2011. There were 51.5 million women age 37 to 41.
Yu Yongding, a former adviser to the central bank, said a higher retirement age won’t change China’s demographic structure and trends. At the same time, “it’s definitely helpful for China’s labor supply, and therefore good for economic growth in the long run,” Yu, a senior researcher at the Chinese Academy of Social Sciences, said in an interview in Beijing. (Bloomberg)
