Beijing’s quick endorsement of a scheme to raise the retirement age shows it is determined to address the problem of dwindling pension funds amid faltering economic growth and an ageing population, analysts say.
But, they add, the changes are unlikely to be a silver bullet for fiscal shortfalls and could come with “political pain”.
For the first time since the 1950s, China has raised its retirement age, increasing it by up to five years. It also increased the amount of time people must pay into pension funds before becoming eligible to withdraw, pushing it to 20 years from 15.
The decision was made on Friday by the National People’s Congress (NPC) Standing Committee, the country’s top legislative body.
Chinese authorities had been contemplating the change since 2008. However, little action was taken until the Communist Party’s third plenum in July when the leadership agreed to raise the country’s retirement age “gradually” in a “voluntary and flexible” manner.