China to increase retirement age to tackle demographic crisis

China is set to gradually postpone its statutory retirement age in an effort to manage the looming demographic crisis, putting heavy pressure on the pension and social security systems.

China's Ministry of Human Resources and Social Security is set to publicise a reform plan on postponing the statutory retirement age, Minister Yin Weimin said.

Yin said the current policy was formulated in the early 1950s when average life expectancy was less than 50.

With average life expectancy due to surpass 70, the retirement policy seems to be out of date and "unreasonable," Yin said.

Also officials say China's workforce retires the earliest in the world.

Currently, people retire aged no more than 55, compared to the mid-60s of many other countries, Yin noted.

The reform plan will postpone the retirement age "step by step until it reaches a reasonable level," according to Yin.

China has 210 million people aged 60 or above, accounting for 15.5% of the population.

It is estimated that by 2020, this section of society will make up 19.3% of the population, and 38.6% in 2050.

This will weigh heavy on government endowment insurance expenditure, as individual pensions have increased from 700 yuan ( $110.36) 10 years ago to more than 2,000 yuan ($335) currently.