Business

China's Working Population to Peak in 2013
By wchung | 07 Jun, 2026

The population of working-age people in China will begin declining after peaking in 2013, according to a recent report by the German financial group Allianz. The number of people aged 15 and 59 will peak at around 920 million.

“If China sticks to its current retirement age, the consequences of the one-child policy will be felt on the labor market from 2013 onward,” said Michael Heise, chief economist and head of corporate development at Allianz.

China’s population stood at 1.34 billion on Nov 1, 2010, according to the latest census data. From 1990 to 2000 the population increased at 1.1 percent a year. In the following decade the rate fell to just 0.6 percent.

On the other side of the picture, a declining fertility rate and increasing life expectancy is raising the average age. People aged under 15 fell from 22 percent of the population in 2000 to 16.6 percent in 2010 while those 60 and older rose from 10.4 percent to 13.3 percent, according to the National Bureau of Statistics.

The result is a steady rise in the old-age dependency ratio from 11.9 percent today to 42 percent by mid-century. The ratio divides the number of people aged 65 and older by the number of working people aged between 15 and 64.

“If one takes into account that the official retirement age in China is still 50 or 55 for women and 60 years for men, the relation between people having already retired and those of working age is even worse,” Heise said.

China now has 18 people aged 60 or older for every 100 between the ages of 15 and 59. The number will jump to 40 by 2030 and 64 by 2050, according to current United Nations estimates.

The aging population is already causing labor shortages that have been growing progressively worse. The most recent news stories reveal a labor shortage even for companies in central and western China which have traditionally had an easy time finding workers. This shortage is putting pressure on businesses to improve efficiency while workers are enjoying big earnings increases.

Average wages in China have been rising about 17 percent per year during the past three years. This rapid rise in income is fueling more consumption and powering even more growth, as well as a 5.5% inflation rate which exceeds the government’s 4 percent target.

But the nation’s social security insurance system faces the risk of becoming unbalanced as fewer young workers contribute to a fund that is being depleted by the swelling ranks of the retired.

Over half of China’s citizens have not purchased commercial life insurance which covers certain risks not covered by the public system, according to a joint survey conducted by Taikang Life Insurance and Peking University’s China Center for Insurance and Social Security Research.

“The swift establishment and improvement of a ‘demography-sustainable’ social security system, with a strong capital-funded pillar, are all the more important,” said Heise.

But the lack of a comprehensive social safety net is one reason China’s households have one of the world’s highest savings rates and it has been increasing over the last decade and a half. The average savings rate of urban households relative to their disposable incomes rose from 18% in 1995 to nearly 29% in 2009. Urban households account for two-thirds of China’s household savings.