Delayed Retirement: Is China Running Out of Money?

China plans to change the mandatory retirement age of its citizens, as part of efforts to alleviate its pension fund crisis that has worsened in recent years due to an increase in the country’s ageing population. On 21 February, China’s State Council announced that it would implement a gradual delay in the legal retirement age, and acknowledged that China’s ageing population is mounting rapidly.

The delayed retirement policy

From 1st March, the Communist Party of China (CCP) started implementing the delayed retirement policy in order to solve the problem of insufficient age-old social security pension funds. Postpone retirement policy was in work for a long time since 2013 but it was delayed because of strong resentment among the labour force, according to Chinese digital platform Tencent.com. On 30 December last year, the State Council of the Communist Party of China issued the “14th Five-Year Plan for National Aging Development and Elderly Care Service System“, which clearly proposed to implement a gradual extension of the statutory retirement age.

There are various signs that the Central Committee of the Communist Party of China is running out of money and that is the reason why emergency measures are being taken to postpone retirement, experts believe. In this regard, Feng Chongyi, a professor at the University of Technology Sydney and an expert on China, pointed out in an interview with the Epoch Times observed – “the only reason for it is that there is no money now.” He said, “the local governments are in short supply and this hole cannot be filled.” But this will obviously leave millions, tens of millions of graduates every year, with nowhere to go, because the old can’t retire, and the young have no chance. This is a conflict. He also pointed out that the CCP’s cruel family planning has destroyed the natural population law, which not only caused the imbalance of the male and female population in China but also greatly affected the supply of labour force and turned China into an ageing society.

The problem of social welfare expenses

The delayed retirement policy reflects that social welfare expenditures related to retirement and old age have become a heavy burden on the central government’s financial expenditure, so it delays retirement to minimize this, its pay pressure, said Wu Jialong. Taiwanese economist. He speculates that the CCP authorities may, in the end, delegate financial power to local governments, and let each local government bear some of its financial expenditures. But it will give priority to paying the military, armed police, public security and national defence forces for stability maintenance, as well as the money to buy food and energy and the rest will not be able to afford it.

He pointed out that it has been seen from its handling of Evergrande that it will not be able to hold on. Because of the explosion of the Evergrande itself, the central government does not want to lend it anymore and does not want to help it support it. Therefore, he believes that delaying retirement is the last resort for the Central Committee of the Communist Party of China to deal with financial pressures. He warns civil unrest will ensue in the future because of financial pressures. To delay retirement age in a bid to ease the pension fund crisis will certainly affect the employment of young people in the country. In response to the new policy, netizens vent their grievances by saying there are no discussions on the improvement of the work environment or welfare benefits, but the implementation of delayed retirement policy is a fraud against the general population.