Official stresses 'tiny steps' to raise retirement age

Raising the retirement age in progressive steps is in line with China's labor market realities and should be prioritized, an official said Tuesday.

Hu Xiaoyi, deputy minister of Human Resources and Social Security, told Xinhua in an interview that considering China's current development stage and some emerging problems, raising the retirement age must go on the government agenda.

The retirement age in China is 60 for men, 55 or 50 for women, according to Chinese regulations, some of which have been in effect since the 1950s.

URGENT NEEDS FOR CHANGE

Back then, life expectancy was only around 40 years, so the rules made sense, Hu said.

"Public health has greatly improved and life expectancy is now 74 years. With the improvement of working conditions, the average intensity of labor is much lower now," Hu said.

According to Hu, the average retiring age for Chinese men and women working in enterprises are only 54. "This is obviously too low," he said.

Meanwhile, there has been subtle changes in the country's labor market.

In 2012, the size of China's working population, or those from 15 to 59 years old, dropped for the first time by 3.45 million from a year earlier. The proportion of working people in the total population dropped by 0.6 percentage point, a recent report showed.

The shrinking labor pool is cutting into China's traditional advantage in labor cost, which is partly credited for its rapid growth over the past three decades.

This sent out a signal that China's labor force will gradually decrease, Hu said.

The country is also seeing a fast aging process, as the ratio of labor force to the aged population dropped from 6.85:1 in 2007 to 4.83:1 in 2012, he said.

TINY STEPS FOR SMOOTH TRANSITION

A reform plan released last month made it clear that China would research on and make policies on progressively raising the retirement age in an effort to push for a more equitable and sustainable social security system.

Hu said the use of "progressive" in the reform plan requires the ministry to let people know about the policy changes in advance.

"We cannot announce a policy this year and implement it next year, but allow a necessary period of time for the public, especially those who are about to retire, to get prepared," according to Hu.

The reform should be divided into steps, such as beginning with those entitled to the lowest retirement age and then expanding to the rest of people, he said.

"We should take tiny steps," Hu said, adding that the country could postpone retirement by a few months in each year to ensure smooth transition and complete the reform over a relatively long time.

Hu also said the government should take multiple supporting policies, such as not allowing retirement in advance, developing more positions suitable for the middle-aged and the old, as well as promoting skills training for the elderly.

By pushing forward the reform in a progressive way, the country will "not only realize steady transition of the new policy, but also avoid huge impact on the current employment situation," he said.