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Old people will have to toil a little longer, assuming they can keep their jobs

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CHINA’S LEADER, Xi Jinping, boasts that his political system has a matchless ability to get difficult things done. “For anything that benefits the party and the people,” he has said, “we must act boldly and decisively.” Yet it was not until September 13th, after years of indecision, that China announced the first raising of its retirement age since the 1950s. From among the world’s lowest, it will begin to creep closer to rich-world norms.

Having seen the unhappy reaction to similar changes elsewhere, Mr Xi may have had reason to hesitate. Turmoil in the West is normally something that China’s propagandists exploit. But huge protests in France last year against a higher pension age triggered anxious and angry comments in China over the government’s repeated mutterings about doing something similar. “The common people are cursing behind closed doors,” wrote one user of Weibo, a social-media platform, referring to the contrast between public anger in France and its furtive form in China.

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When China at last bit the bullet and published its own timetable, it did so with little fanfare. State-run television mentioned the move below several other headlines on its main evening news. Viewers had to wait more than 35 minutes (and sit through nearly 20 minutes telling of Mr Xi’s activities) for just a bare outline. The retirement age for female blue-collar workers will rise from an astonishingly low 50 to 55, for female white-collar workers from 55 to 58, and for men from 60 to 63 (see chart 1). These changes will begin in January 2025 and be phased in over 15 years. For men and female white-collar workers, the pension age will rise by a month every four months. For blue-collar women it will rise by a month every two months.

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The evening news did not bother with a follow-up report. But Chinese netizens were very much bothered by the government’s actions. Posts with the hashtag “reform to delay the statutory retirement age” have garnered more than 870m views and over 240,000 comments on Weibo. Censors have been swift to move in. More than 5,100 of these comments were posted below an early report by Xinhua, the government’s main news agency. Try reading these now; fewer than 30 remain, none of them disapproving.

But anger abounds among comments still visible on less-filtered accounts. “Capitalist exploitation has reached the common people. Brilliant!” wrote one in a typical thread. “So, who was the People’s Congress representing?” asked another, referring to the country’s rubber-stamp legislature that suddenly approved the reform without public consultation. A third weighed in: “Corrupt officials would love to work for ever.” And another: “If this continues, society will descend into chaos.”

That is unlikely. Surveillance is so intense and the police so determined to crush unrest that even if there are demonstrations, they are almost sure to be small and far from the country’s most politically sensitive locations. It would be hard to imagine China tolerating the kind of protests that erupted in Russian cities in 2018 over pension-age reform.

China paid attention to those events, including the concessions made by Russia’s ruler, Vladimir Putin. Russia’s original plan was to raise the retirement age for women from 55 to 63. Mr Putin revised that to 60, though he stuck to 65 for men (up from 60). It had long been expected that when China made its own move, it would announce gradual steps towards 65 for men and women. This would be just over the average in the OECD, a club of mostly rich countries, which in 2022 was 64.4 for men and 63.6 for women. In the end, China settled on a plan that will see men required to work until they are 63, though they may go on until 66 if they choose. Women will enjoy similar flexibility.

Chart: The Economist

So why, if China is so capable of preventing protests, did it not act earlier? After all, it faces a demographic crunch and looming pension-fund crisis no less fearsome than those of other countries that have raised their retirement ages. Life expectancy has risen from 35 when the Communist Party seized power in 1949 to 77 today, less than three years below the OECD average. People over 60 already make up more than a fifth of the population. By 2035 that ratio will be closer to a third (see chart 2). The working-age population—from which pension contributions are drawn—is falling. Some experts have said that without any change, the state’s pension fund, on which most retired people rely (private pensions have yet to take off), would have run out of money by 2035.

Concerns raised by critics of reform may have resonated among policymakers. In many households, the retired play a crucial role in providing child care. Keep them at work longer, a common argument goes, and young people will be even less inclined to have babies.

Another oft-heard objection to reform is that forcing people to work longer will make it harder for young people to get jobs. Youth unemployment in China is eye-wateringly high. It reached 21.3% among urban residents in June 2023. The government then spent months rejigging its calculations and came up with a somewhat less embarrassing rate. In July it was 17.1%. But this argument against raising the retirement age holds less water: making people work for longer could encourage them to consume more, which could boost the economy and create jobs.

For every person who is anxious about youth unemployment there is someone who frets that raising the retirement age will cause the same problem among the elderly. Age discrimination is rampant in China. Working longer may be fine for people in secure jobs, such as in the civil service or state-owned firms. But in the private sector people worry they will be forced out before they reach retirement age because they are considered too old. On social media, commenters seethe about state employees for another reason, too: their pensions are much higher.

Amid this debate a huge part of the population is often ignored. More than half of China’s citizens have a rural hukou, or household registration, including most of the 300m or so people who have moved from the countryside to work in cities. Many are only entitled to a pension that is a tiny fraction of the amount given to those registered as urbanites. It is about 200 yuan ($28) per month on average.

No change to this has been announced. The pensionable age for many rural hukou-holders will remain at 60. One user of Weibo pointed out a reason for the silence. “If pensions were distributed evenly across the entire population, including farmers, I bet everyone’s pension would be less than it is now,” he wrote. (By “everyone”, he meant “urban people”.) Mr Xi’s calls for “common prosperity” do not, it seems, imply equality for farmers and migrants. ■

Subscribers can sign up to Drum Tower, our new weekly newsletter, to understand what the world makes of China—and what China makes of the world.

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This article appeared in the China section of the print edition under the headline “Sunset delayed”

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China

September 21st 2024

• →Anger abounds as China raises its strikingly low retirement age
• →By raising the retirement age, has China created a care crisis?
• →China has freed an American pastor. Does it want anything in return?
• →A typhoon hits Shanghai and the Chinese economy groans

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From the September 21st 2024 edition

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Panama symbolises the Sino-American struggle for influence

The superpowers use soft and hard power

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Tensions with the West are fuelling China’s anxiety about food supplies

Grain pains are growing

Hail China’s new “ice-and-snow economy”

The country is betting on winter sports and tourism to boost growth in its rustbelt

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Источник: www.economist.com