Why China Needs New Retirement Role Models

80-year old Wang Deshun, dubbed China’s “hottest grandpa” among his many social media fans, represents everything that is new about old age in China. Catapulting to international fame after strutting the catwalk shirtless at the China Fashion Week in Beijing last year, Mr. Wang is ambitious, witty, energetic, and showcases a physique that puts most men half his age to shame. “Nature determines age, but you determine your state of mind,” says Mr. Wang.

Indeed, the older he gets, the more unstoppable Mr. Wang appears. At age 49, he decided to become a body-builder, and he now works out three hours a day to maintain his impressive physique. At age 65, he learned to ride a horse. Two years ago, at age 78, he became a motorcycle enthusiast.

 

Mr. Wang’s rise to fame coincides with a critical tipping point in China’s history. China’s population is aging at unprecedented rates. Until very recently, China had always been a youthful nation. In 1950, life expectancy was just 43 years, and the median age was 24. Today, life expectancy is 77 and the median age is 35. China’s one-child policy, implemented in the 1970s, slammed the brakes on population growth among younger populations, while the growth of older populations is accelerating. Between 2015 and 2035, the age 65+ population is projected to increase 128%.

And yet, China’s institutions, traditions, and social structures, along with the way many Chinese tend to think about later life, have largely been stuck in the past. Most older Chinese, ushered out of the workforce at early ages (city-dwelling Chinese men generally retire no later than age 60, while women retire in their early 50s), are unproductive for decades of their lives. Retirees are often dependent on family or the largesse of government or private sector pensions. Civic engagement and volunteering in retirement are virtually non-existent.

 

The Chinese model of retirement contrasts starkly with the way retirement has been evolving in other nations. In the U.S., for example, retirement increasingly means continued productivity, social engagement, and financial self-reliance. Today, one in five Americans age 65+ are working, up from just 13% in the year 2000. Retirees volunteer the most hours of any age group in the U.S. And after most companies replaced defined benefit pensions with 401(k)’s, Americans are now largely responsible for preparing for their own retirements.  

 

The Chinese retirement is increasingly unsustainable. China’s working-age population began to shrink in 2016, which will impose growing burdens on the country’s pension system and economy. Analysts have long warned that China's state pension have a severe funding shortage. Some estimate the cash shortfall could rise to be nearly $11 trillion in the next 20 years.

 

Moreover, the old model of retirement does not match the health, vitality, and potential of new generations of older Chinese. Thanks to vast improvements in health and education, says James Smith of the RAND Corporation, “in 20 years, Chinese people who are 50 today are not going to look at all like Chinese people in their 70s right now.”

Government policy changes are necessary to enable Chinese to continue working longer. But what is also required is a far-reaching cultural shift that empowers people to view retirement as an opportunity to remain productive and engaged. Role models like Mr. Wang will undoubtedly inspire many to re-think aging. More are needed to help pioneer a new course for China's future.

© 2020 Baxter Consulting Group