China will implement delayed retirement, is it a blessing or a curse for the people?

Chinese officials last year proposed delaying retirement to ease the impact of demographic changes. China’s Ministry of Human Resources and Social Security responded on the 26th, saying that it is studying with relevant departments about the implementation of the delayed retirement plan. The news immediately sparked great concern.

In recent years, China’s birth rate has plummeted and the aging population has continued to rise, with the consequent decline in the working population and pension payments coming to the surface.

Is the official decision to delay retirement imminent?

Speaking at a press conference held at the State Council Information Office on Friday, Chinese Vice Minister of Human Resources and Social Security You Jun said that the problem of China’s overall low retirement age appears to be very obvious. In the next five years, China’s elderly population will exceed 300 million, and the working-age population will decrease by 35 million.

He said that delaying retirement is conducive to the full utilization of human resources; enhancing the sustainability of the social security system is also a common practice in countries around the world to cope with the aging population. The Ministry of Human Resources and Social Security is currently working with relevant departments to study specific reform proposals.

Mr. Liu, a Chinese media personality who did not want to disclose his full name due to security concerns, analyzed that population aging is not the main reason for the decline in the number of people in the labor force, and delaying retirement will not solve the problem.

“The root cause is still the birth rate going all the way down and fewer people are filling in than retiring. Raising the retirement age can statistically alleviate the workforce problem, but there are many doubts whether people at 65 can in fact really become an effective workforce.”

At the same Time, the Ministry of Human Resources and Social Security also responded to the question of whether delayed retirement would affect the employment of young people, saying that young people have jobs for young people and older people have jobs for older people, with little crossover with each other. Although there are some positions in the reform transition period will have an impact on young people in the short term, but very limited.

Qin Peng, a political and economic analyst in the United States, said in an interview with our reporter that after the delayed retirement, there will be fewer jobs for young people.

“Most companies have a near-fixed, or relatively stable, growth in annual output, so the number of people needed is near-fixed. The Ministry of Human Resources and Social Security said it would study the possibility of a gradual delay in retirement, meaning that it would try to reduce the impact and make it less obvious to everyone.”

He also singled out other countries where the delayed retirement age has been accompanied by an increase in various ancillary benefits.

“Other countries don’t have their pensions all coordinated, civil servants, state enterprises and institutions don’t pay, but take higher pensions than ordinary retired workers. China has. Normal countries have very good pension management, constantly increasing in value and not being misappropriated or embezzled by government officials. Other countries don’t have such huge government and party organs to feed, China does.”

Delayed Retirement and the Pension Gap

China’s official media Xinhua reported last year that the 14th Five-Year Plan and the proposed 2035 visionary goals proposed “implementing a gradual delay in the statutory retirement age.” The news immediately stirred up public debate. The public has speculated that the reason behind the official move may be related to the shortage of pensions.

In the face of public skepticism, the Ministry of Human Resources and Social Security stressed on the 26th that it can ensure that pensions are paid in full and on time, and that according to the principle of more contributions to pensions and more benefits for longer contributions, pensions will not only be paid out but will increase after delaying retirement.

Liu, however, cautioned that this is nothing but an official steal of concept.

“Evade the fact that you will receive at least five years less. For example, before the delay, the pension is 5,000 yuan per year; after the delay, it is 6,000 yuan per year. 5,000 yuan for 15 years and 6,000 yuan for 10 years, anyone with eyes can see which is more.”

Qin Peng also blasted the Chinese government for only wanting to continue to “make money” by delaying the retirement age, but refusing to massively reduce the size of the civil service and solve the financial burden, leaving the inefficient and large assets of state-owned enterprises to fill the pensions. He believes that making the people pay more is a “hooliganism”.