Plenum Explained: Reforms for Retirement, Social Security and Employment

The five-year reform blueprint, released following a key Communist Party gathering, aims to advance Chinese modernization through several policy initiatives targeting social security, population development, education, and technology. The plan includes gradual increases in the retirement age, removal of social security restrictions for migrant workers, and enhanced employment support for college graduates [para. 1][para. 2].

China's strategy to refine population development involves raising the statutory retirement age, currently set at 60 for men and between 50 and 55 for women, depending on their job. This method will follow the principle of “voluntary participation with appropriate flexibility.” Additionally, the reform plans to improve elderly care services and foster a childbirth-friendly society by reducing the costs of childbirth, parenting, and education [para. 4][para. 5]. This is crucial as people over 60 are expected to constitute about 30% of the population by 2035, and the country’s birthrate reached a historic low in 2023. References to a childbirth-friendly society have been recurring in official documents since the introduction of the three-child policy in 2021, with over 30 regional authorities offering financial support for childrearing [para. 6][para. 7][para. 8].

In terms of social security, the resolution plans to abolish restrictions that prevent people from accessing social security in places where they work but don't hold permanent residency, in line with the aim of “people-centered urbanization.” This includes developing a unified national social insurance platform and ensuring that social security funds' value is maintained and increased over time [para. 10][para. 11]. This policy is particularly significant as nearly 300 million people with rural household registrations were living and working in urban areas in 2023. These workers often face challenges in accessing equal housing, education, and pensions. Therefore, enabling easier access to affordable medical care by granting local medical insurance is essential. Several regions, excluding top-tier cities like Beijing and Shanghai, are already exploring such systems [para. 12][para. 13][para. 14].

To deepen employment and education reforms, China aims to enhance job support for college graduates, rural migrant workers, and former military personnel. This support will include fostering new employment forms and lifelong vocational training. The resolution also targets higher education reforms to align with the scientific and technological development needs, including planning disciplines and majors that are critically in demand [para. 16]. This is significant given the job market pressure due to a sluggish post-pandemic recovery and a prolonged property slump, leading to a high youth unemployment rate of 13.2% last month, down from a record 21.3% in June 2023. Additionally, many of the estimated 200 million people involved in less formal employment, such as delivery services, lack labor contracts and access to social benefits like affordable health care [para. 17][para. 18].

To cultivate highly-skilled, innovative workers for self-reliance in science and technology, authorities have urged higher education institutions to address shortages in key areas like intelligent medicine, medical devices, and rural planning and design [para. 19][para. 20].

For detailed policies on finance, economy, and business, contact reporter Kelly Wang at jingzhewang@caixin.com or editor Joshua Dummer at joshuadummer@caixin.com [para. 21][para. 22].