China's elderly population is forced to work even after retirement age, know the reason for this?

For many of the 100 million migrant villagers in China who will reach retirement age in the next 10 years, one option is to return to their villages. Surprisingly, the generation that came to China's cities to build infrastructure and work in factories, which made China the world's largest exporter, has now seen its lifestyle decline rapidly and it Is facing risk.

Symbolic picture.Image Credit source: Getty Images

Generally, every person wants to say goodbye to work after the age of 60 and live a comfortable life. The government system also sets this age for retirement. But, the situation in China is somewhat different. The aging population here has to work even after 60 years to earn a living. After selling buns on the streets of Xian for three decades, 67-year-old Hu Dexi wakes up every day at 4 a.m. to cook lunch. Then, along with his wife, he works as a sweeper in the city's shopping mall. His earning from there is 4,000 yuan. This is just an example. Let us know why China's elderly population is turning away from retirement...

For many of the 100 million migrant villagers in China who will reach retirement age in the next 10 years, one option is to return to their villages. He will survive on a monthly pension (123 yuan i.e. $17) and other work. Surprisingly, the generation that came to China's cities to build infrastructure and work in factories, which made China the world's largest exporter, has now seen its lifestyle decline rapidly and it Is facing risk.

'Migrant workers are returning to rural areas'

A news agency interviewed several people, including rural migrant workers, economists, and government advisors, who described a social security system ill-suited to the worsening demographic crisis. According to Fuxian Yi, a scientist at the University of Wisconsin-Madison, the elderly in China will live long and miserable lives. More and more migrant workers are returning to rural areas. Some are forced to do low-paying jobs. It is becoming very difficult for them to live life in this condition.

'Economy may fall into middle-income trap'

If these migrants were solely dependent on China's basic rural pension, he said, they would be living below the World Bank's poverty threshold of $3.65 a day. However, many people raise money by working as laborers in cities or by selling their crops. Recent figures released by China show that out of about 94 million working people, about 12.8% were above 60 years of age in the year 2022. Which is more than 8.8% in 2020.

These figures are less than Japan and South Korea. More than 300 million Chinese people will be over the age of 60 in the coming decade, a skyrocketing figure. One-third of this group is rural migrants. On condition of anonymity, a government advisor told the agency that China did not take strong and beneficial steps for such people. The main reason for this is that policymakers fear that the economy may fall into the middle-income trap.

'If we don't improve it will be very difficult'

He said that regarding President Xi Jinping's policy for the development of industries, American and European officials say that this policy is unfair to Western companies competing with Chinese producers. This will lead to trade tensions and take resources away from households. This will reduce domestic demand and China's future growth potential.

However, China rejects these claims. Regarding the pension policy debate, the government advisor says that it will be easier to solve the problem of equality if we can first solve the problem of productivity growth. He said people have different opinions. In response to the question of whether China can leapfrog in productivity, he said, I believe that if we do not make further reforms and continue to be at odds with the international community, it may be difficult.

What is Hukau?

There is a household registration system in China. It works as a kind of internal passport. This is called Hukou, which divides the population on urban and rural basis. Monthly urban pensions range from about 3,000 yuan in less developed provinces to about 6,000 yuan in Beijing and Shanghai. Data from 2009 show that rural pensions implemented in China are very low.

In March, China increased the minimum pension by 20 yuan to 123 yuan per month. 170 million people benefited from this. Nomura economists say transferring resources to the poorest Chinese households is the most effective way to boost domestic consumption. But rural pension growth is not even 0.001% of the country's GDP ($18 trillion). The Chinese Academy of Social Sciences (CASS) believes that the pension system will run out of money by 2035.

Let us tell you that Beijing has started private retirement plans. Money is being given to provinces with pension budget deficits. In China, the retirement age for men is 60 years, and for women 50-55. China is planning to increase the age of this limit.