China population: with 20 million fewer people projected by 2035, will the retirement age have to be raised?

China’s population is expected to plunge by 20 million to 1.39 billion by 2035, according to the Economist Intelligence Unit (EIU)

Report suggests raising the retirement age to 65 by 2035 could address a shortfall in China’s pension fund by increasing contributions as its ageing crisis deepens

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China’s population aged above 60 will account for 32.7 per cent of the population, the Economist Intelligence Unit (EIU) said, up from 21.1 per cent in 2023. Photo: EPA-EFE

Published: 10:00am, 7 Feb 2024Updated: 11:21am, 7 Feb 2024

China’s population is expected to plunge by 20 million to 1.39 billion by 2035, a report has predicted, further clouding long-term economic prospects and creating implications for delayed retirement and an accelerated automation rate.

The Economist Intelligence Unit (EIU) said last week that China’s population has reached its peak.

And despite a brief rebound of newborns in the next couple years, the number would continue to decline due to China having fewer women of childbearing age, delays in people getting married, as well as the growing popularity of not having children altogether, according to its report.

“The government’s pronatalist policies will have a limited effect. Married couples have cited high economic costs as a major reason for having fewer children, based on various market surveys,” the EIU report said.

China’s population dropped for a second year in a row in 2023, falling by 2.08 million from 2022 to 1.4097 billion, while Chinese mothers only gave birth to 9.02 million babies last year, representing the lowest level since records began in 1949.

Meanwhile, China’s workforce is also shrinking, as its working-age population aged between 16-59 also fell from 875.56 million in 2022 to 864.81 million last year, which may lead to an acceleration of automation, as well as the postponement of the retirement age, the report said.

“[But] the government [is expected] to postpone the retirement age only gradually to avoid cannibalising young hires at a time when youth employment is already at all-time high, which risks social stability,” the EIU said, with China’s adjusted jobless rate for 16 to 24 age group standing at 14.9 per cent in December.