The decision to increase China’s retirement age could significantly improve its demographic and economic outlook by 2075. Let’s explore why this change is critical:

China’s Demographic Picture in 2075

If the retirement age remains at 55:

41.9% of the population (aged 18–55) would need to support 51.3% of the population (aged 55 and above).

This translates to 1.23 elderly individuals relying on every 1 working-age person—worse than Italy in 2022, where 1.16 elderly depend on each working person.

If the retirement age is raised to 65 (as planned):

59.3% of the population (aged 18–65) would support only 31.9% of the population (aged 65 and above).

This ratio improves to 1 elderly individual per 2 working-age people—better than Japan and South Korea in 2022, where 1.435 elderly depend on 2 working individuals.

By implementing a retirement age of 65, China would not only avoid a severe demographic imbalance but also outperform Japan and South Korea's current dependency ratios. This adjustment ensures the sustainability of China’s silver economy, a term reflecting the economic benefits of a healthier, longer-lived aging population.

The Western Perspective on Retirement

Western nations have long embraced higher retirement ages, typically around 65 or older. This approach was often overlooked in discussions about China’s demographic decline. Raising the retirement age offers a practical way for China to mitigate demographic challenges and maintain a balanced economic structure.

Key Challenges to Overcome

Cultural Resistance:

Many Chinese workers in their 50s have traditionally planned to retire at 55. Extending the retirement age by 10 years may face resistance, requiring a cultural shift and careful implementation.
Employment for Younger Generations:

Raising the retirement age may reduce job openings for recent graduates, potentially exacerbating youth unemployment. To counter this, China must focus on creating more jobs. Currently, the country generates 4–5 million new jobs annually but will need to double that to 8 million per year.
War and Population Loss:

In the event of a war, China risks losing up to 500,000 individuals aged 18–30, equating to a loss of 3.5 million working-age people. To minimize such losses, China is prioritizing advancements in unmanned aerial vehicles (UAVs), missiles, and robotics to reduce human casualties in potential conflicts.

Conclusion

Raising China’s retirement age from 55 to 65 is a vital step toward addressing its looming demographic challenges. This move would significantly enhance the working population's ratio to dependents, ensuring economic stability well into 2075. While implementing this change comes with hurdles, such as cultural resistance, unemployment concerns, and potential workforce losses due to conflict, these challenges can be mitigated through strategic job creation and technological advancements.

Ultimately, by adopting this strategy, China could maintain a competitive edge, avoid a demographic crisis, and position itself favorably compared to nations like Japan and South Korea, even decades into the future.

Frequentyl Asked Questions (FAQs)

How will raising the retirement age affect China's youth unemployment?

Raising the retirement age in China may lead to fewer job openings for younger workers, potentially increasing youth unemployment. To counter this, China will need to accelerate job creation, focusing on industries like technology, green energy, and manufacturing to absorb the growing number of graduates entering the job market.

Can technology help China overcome workforce challenges caused by its aging population?

Yes, China is investing heavily in robotics, artificial intelligence, and automation to offset the decline in its working-age population. These advancements can reduce labor dependency, particularly in industries like manufacturing, logistics, and defense, helping China maintain economic and military efficiency despite demographic challenges.

Why is raising the retirement age important for China’s economy?

Raising the retirement age helps address China’s aging population by increasing the ratio of working-age individuals to retirees. This reduces the strain on pension systems, supports economic growth, and ensures that more experienced workers continue contributing to the economy.

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Raising the Retirement Age: A Solution to China’s Demographic Challenges