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- China’s young people are abandoning retirement savings, The New York Times reported.
- The aging population and declining birthrate have intensified the pension crisis.
China’s pension system is facing a reckoning.
A rapidly aging population, difficulties finding a job, and concerns about low pay are weighing on the minds of the country’s young people.
For some, that has led them to refuse to save for retirement entirely, according to an in-depth report in The New York Times.
Tao Swift, an unemployed 30-year-old based in Chengdu, told The Times that he’s uncertain there will be a pension fund the time he retires.
“Retire with a pension?” he said. “I don’t hold much hope that I can definitely get my hands on it.”
Around 300 million Chinese citizens aged between 50 and 60 are set to retire within the next decade, BBC News reported.
That demographic — the country’s largest age group — is nearly equivalent to the entire US population, the outlet added.
Within the next 25 years, most of the population will be older than the nation’s average retirement age, 54, which is the lowest in the world, The Times reported.
In comparison, the Organisation for Economic Co-operation and Development, an intergovernmental organization consisting of 38 member countries (including the US), recorded an average retirement age of 63.4 years for women and 64.2 years for men in 2020.
The Chinese Academy of Social Sciences, a government research institution, predicted that the public pension will run out of funds over the next decade, as cited The Times.
Additionally, the continued declining birthrate means there will be fewer people entering the workforce than before.
Last year, former central bank Gov. Zhou Xiaochuan said many Chinese people may need to rely on private pension savings due to the pension shortfall.
The government has encouraged Gen Z and millennials to keep saving — but not everyone is convinced they will ever see the money.
“Their appeal has a reverse effect,” Lumiere Chen, a 27-year-old private insurance agent based in Beijing, told the Times.
“Because of the aging population, people are skeptical about their future pensions,” Tao Wang, chief China economist at UBS, told The Times. “They worry that in the future the payout would be less.”
Wang said that one solution could be to lower the “alarmingly low” retirement age. But no such action has been taken.
There’s also the matter of unemployment and low-paying jobs, which is causing young people on social media forums to question whether they are capable of saving for old age, The Times reported.
In December 2023, the unemployment rate of people aged 16 to 24 was 14.9%, according to the National Bureau of Statistics China. The rate for those aged from 25 to 29 and from 30 to 59 was 6.1% and 3.9%, respectively.