China is to raise its retirement age for the first time since 1978, a move likely to slow a decline in the labor force, but anger workers already wrestling with a slowing economy.
The country’s top lawmakers endorsed a plan to gradually delay retirement for employees, Xinhua news agency reported yesterday.
Men’s retirement age would increase from 60 to 63, while women’s would rise from 50 and 55 to 55 and 58, the report said.
Photo: Hector Retamal, AFP
The changes would take place over 15 years, starting on Jan. 1 next year, it said.
“Governments at all levels should actively respond to the aging of the population, [and] encourage and support the employment and entrepreneurship of workers,” the Standing Committee of the Chinese National People’s Congress said.
They also called on officials to protect workers’ rights and improve care for elderly people, and empowered the State Council, China’s Cabinet, to adjust the measures if necessary. The approval followed a July announcement that the retirement age would rise in a “voluntary, flexible manner.”
Allowing more people to work longer would counter demographic headwinds weighing on China’s economy, although it risks adding to public discontent amid an economic slowdown.
“The timeline of raising the retirement age is pretty gradual. Policymakers probably have taken into account the potential negative impact and calibrated that carefully,” Societe Generale SA greater China economist Michelle Lam (林雪潔) said.
The document said that starting in 2030, China’s workers would also have to pay longer into their pension accounts before they are eligible to receive their retirement payout. The requirement would be raised to 20 years from 15.
The top legislature’s discussion of the plan earlier this week triggered an outpouring of anger on social media, with many people complaining about a sluggish job market.
Some also said that employers often discriminate against older candidates, a problem that the Chinese government last month vowed to address.
China’s retirement age is among the world’s lowest, despite significantly increased life expectancy.
Since at least the 1970s, the threshold for workers has been kept at 60 for men and between 50 and 55 for women. The change would see women’s retirement age rise to 55 for ordinary workers and 58 for those in management positions.
A bigger tax base and delayed access to benefits would relieve the pressure on the government to fund pensions as the population rapidly ages, with the birthrate falling to a record low last year.
“The sustainability of the pension system may be the main consideration behind the move,” said Ding Shuang (丁爽), chief economist for greater China and North Asia at Standard Chartered. “The impact on the economy in the short term should be limited as the hike is gradual.”
People aged 65 or older are expected to make up 30 percent of the population by about 2035 from 14.2 percent in 2021, a report by state broadcaster China Central Television said on Tuesday.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
RSS