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SCMP Editorial

Retirement is a complex issue in mainland China, given the size of its population, fast-changing demographics, gap in development between urban and rural areas and differing pension contribution rates from place to place.
Life expectancy is rising, birth rates falling and the stress on the mandatory welfare fund mounting. There is consequently uncertainty for many Chinese about what to expect when they stop working.
Authorities are well aware of the challenges and have plans for a way forward, but it will take time to formulate and put in place the far-reaching measures.
How much a person needs to retire is a question that has no straightforward answer. The mainland has achieved remarkable economic growth and development over the past four decades and lives have markedly improved.

But while a social welfare system has been put in place that in theory offers good protection, in practice its effects are uneven and in places, inadequate. That is especially so for retirees; while white-collar workers can usually expect their so-called golden years to be relatively comfortable, those who have worked in factories or live in rural areas cannot count on life being so good.
All employees, including rural migrant workers, are supposed to be covered by one of two state pension schemes administered by local and regional governments.
Under an urban plan, employers are responsible for contributions of up to 16 per cent of an employees’ monthly wage, with the worker able to give as much as a further 8 per cent.
Urban and rural residents not covered can pay into a supplementary scheme, although the benefits are significantly less and for most people, insufficient for even the most basic needs. About 71 per cent of the urban workforce is covered, but hundreds of millions, mostly migrant workers and those in flexible employment, are not.
How does China find jobs for 900 million people?
Exacerbating matters are retirement ages that are low by the standards of most countries; 50 for blue-collar women and 55 for white-collar ones, and 60 for most men.
The government said in March that it would “gradually postpone the legal retirement age” over the next five years, but gave no details. That is a sensitive issue, especially for those approaching the milestone, while it also creates anxiety for people wishing to advance their careers or feel secure about their job.
Ageism also exists in certain sectors, with 35 being the perceived ceiling in tech and for factory workers, the latter usually being migrants from rural areas.
A fast-ageing population with evermore retirees and a shrinking workforce is a serious problem. One state think tank estimates funds in the urban pension scheme will peak in 2027 and may be depleted by 2035. Social well-being and stability are at risk and prompt decisions need to be made.


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Senior citizens at a community elderly care center in Suzhou, China. Photo: Xinhua

For many rural Chinese in particular, retirement remains a fantasy due to a lack of savings and limited pension coverage.

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More services will be needed to meet the needs of China’s ageing population. Photo: Xinhua

(211014) -- LIUPANSHUI, Oct. 14, 2021 (Xinhua) -- Medical workers provide free medical care service to the elders at a university for senior citizens of Zhongshan District in Liupanshui, southwest China's Guizhou Province, Oct. 14, 2021. Various activities are carried out in the district to celebrate the Double Ninth Festival or the Chongyang Festival for the elders. The festival, celebrated throughout China on the ninth day of the ninth month on the Chinese lunar calendar, is an occasion to care for and send blessings to the elderly. (Xinhua/Tao Liang)

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China’s working age population, those aged between 16 and 59, is expected to decline by 35 million over the next five years. Photo: Reuters

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Beijing says that it will “gradually” increase China’s mandatory retirement ages that have been unchanged for 70 years. Photo: Xinhua

Beijing says that it will “gradually” increase China’s mandatory retirement ages that have been unchanged for 70 years. Photo: Reuters

Opinion


A fast-ageing population with evermore retirees and a shrinking workforce is a serious problem in mainland China with a state think tank estimating that funds in the urban pension scheme may be depleted by 2035
Social well-being and stability are at risk if far-reaching measures are not soon put in place



A fast-ageing population with evermore retirees and a shrinking workforce is a serious problem in mainland China with a state think tank estimating that funds in the urban pension scheme may be depleted by 2035.


China census and demographics 2021

China economy

China's population

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


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Editorial