Govt· Policy

China may extend retirement age to cope with aging population

minutes 2021/03/02 02:32:02

Mar 02, 2021 (China Knowledge) - On Feb, 26 China’s Ministry of Human Resources and Social Security (MHRSS) released employment data for 2020. According to figures, the employment situation last year has inched up quarter by quarter, generally stable, and better than expected. In 2020, a total of 11.86 mln new jobs were created in urban areas, exceeding the annual target of 9 mln jobs. The unemployment rate in urban areas also fell quarter by quarter, reaching 5.2% in December and 5.6% in the whole year on average, lower than the expected target.

According to You Jun, Vice Minister of the MHRSS, it has systematically planned and designed the third-level system model under the framework of the multi-level endowment insurance system. After sufficient research and drawing lessons from international experience and summarizing some domestic pilot experience, a preliminary idea has been formed. The overall consideration is to establish a personal pension based on the account system, with voluntary participation from individuals, tax support from the state finances, and market-oriented capital investment and operation, which is being launched in full-swing. Following this, the MHRSS will promote, introduce, and implement it as soon as possible, in order to meet the diversified needs and better protect the happy life of the elderly.

At the press conference of the State Council Information Office, Zhang Jinan, Minister at MHRSS highlighted the employment in 2021 will remain stable. However, there are still many uncertainties and unpredictable factors, and the employment situation is still complicated and could face many challenges.

Firstly, the pressure on total employment remains unchanged. In 2021, there are estimated to be approximately 15 mln workers in the labor force in need of employment. There is also an estimated 9.09 mln college graduates that also will reach a new high.

Second, structural contradictions are still prominent, with difficulties in employment and recruitment co-existing. For example, in the manufacturing and service sectors, it is difficult to recruit general workers, and there is a shortage of skilled workers. The demand for talents remains prominent. So for every skilled person, there are 2 jobs waiting.

Third, the impact of the epidemic is complex and changeable, the international pandemic is still spreading, and the pressure of curtailing imported cases and preventing the spread of domestic cases is also relatively large, which adds uncertainty and risk challenges to employment.

In the next step, the MHRSS will implement priority policy and precise remedy to solve these changes. It has formulated a 5-step plan:

The No.1 priority the MHRSS will strive to stabilize employment. They will maintain basic employment level by assisting both employers and employees. Although there were some policies from 2020 that were withdrawn, there are still many policies to be implemented, such as employment subsidies, returning unemployment insurance, and job training. These policies need to be prescribed and implemented effectively.

Two, is to focus on key groups. If key groups are stable, employment will be stable. Targeted employment services are to be provided to key groups such as the unemployed, college graduates and migrant workers.

Three, is to expand employment channels. The MHRSS will support the development of labour-intensive industries, support small, medium-sized and micro enterprises, support workers' entrepreneurship, improve the labour social security system for flexible employment, and further expand the employment space.

Fourth is to strengthen vocational training. In-depth implementation of vocational skills improvement and ensure effectiveness of training. These are important measures to solve the structural and problematic issues in employment.

Finally, the MHRSS will make efforts to strengthen financial assistance. This will be done by focusing on providing employment assistance to the urban poor and the rural low-income population, ensuring the basic livelihood of the unemployed and securing of the people's basic livelihood.

In recent years, people from all walks of life have been paying close attention to the topic of delayed retirement. On the Feb 26, Deputy Minister of MHRSS, You Jun, stated that the gradual extension of the statutory retirement age is a major decision to be made based on the China's economic and social development, which is conducive to the full utilization of China's human resources; as well as, the enhancement of the social security system. The sustainability of the system better guarantees the basic living standards of its people.

Internationally, it is a common practice in countries around the world to delay retirement age to cope with the aging population. In recent decades, most countries have raised the retirement age to different degrees, and the retirement age of major economies is generally over 65 years old.

The MHRSS is currently working with relevant departments to study specific reforms. During the research and formulation of the plans, opinions from various aspects will be widely heard, opinions and suggestions from all walks of life will be fully absorbed, and social consensus will be gathered. By finding the common ground, it would allow for scientific, feasible and stable implementation of the reform plans.

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