How raising China’s retirement age can help Beijing buy time to plug the pension gap
Last week, China announced plans to gradually raise retirement ages by up to five years by 2040, starting from January
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China to raise retirement age by up to five years amid economic slump
In China’s three northeastern rust-belt provinces of Liaoning, Jilin and Heilongjiang, where ageing rates have been among the nation’s highest, pension fund shortfalls present a long-term vulnerability.
Last year, the three provinces received a combined 180 billion yuan (US$25.4 billion) in central government transfer payments to fill the void in their pension funds, according to the Ministry of Finance, with the figure representing more than half of their total tax revenues of 342.9 billion yuan.
Across China, just half of all provincial administrative regions recorded pension fund surpluses that could be turned over to the central government last year, with only four – Guangdong, Beijing, Jiangsu and Anhui – able to hand in at least 10 billion yuan each.
Guangdong, China’s largest provincial economy with only 15 per cent of its 120 million population aged 60 or above, handed in 115.8 billion yuan alone last year.
But analysts have long questioned whether provinces like Guangdong can continue to support rust-belt regions if they start to grow old themselves.
And for regions already grappling with steep population ageing and pension fund deficits, raising retirement ages is viewed as the only option.
