China’s Retiree Pension Hike for 2025 Is the Smallest on Record
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China will raise basic pension payments for its retirees by 2% this year, the slowest pace of increase on record, as the world’s second-largest economy grapples with a slowing growth rate and mounting long-term pressures on its state-run pension fund.
The Ministry of Human Resources and Social Security, along with the Ministry of Finance, announced on Jul. 10 that the adjustment would take effect for all individuals who had retired by the end of last year.
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- China will raise basic pensions for retirees by 2% in 2025, the slowest increase on record amid economic and fund pressures.
- Urban retirees' average monthly pension reached 3,825 yuan in 2024, over 15 times higher than rural retirees, highlighting growing inequality.
- Experts urge reforms as pension hikes outpace wage growth for some, threaten fund sustainability, and create "pension inversion" for newer retirees.
AI generated, for reference only
What Happened When
- 2005：
- China began 21 consecutive annual pension hikes for retirees.
- 2011：
- The Social Insurance Law was enacted, mandating regular pension increases.
- 2015：
- A decade of 10% annual pension hikes ended; average pensions for private sector retirees rose from 700 yuan in 2005 to over 2,000 yuan.
- 2016：
- The pension increase rate dropped to 6.5%.
- 2020：
- Pension increase rate hit 5%; State Council document set a threshold for pension adjustments based on CPI and wage growth.
- 2023：
- Pension increase rate recorded at 3.8%.
- 2024：
- Pension increase rate dropped to 3%; lower limit for the social-security contribution base rose by 4% to 6% in many provinces; urban worker average monthly pension was 3,825 yuan, rural resident average was 246 yuan.
- By the end of 2024：
- Adjustment announced on Jul. 10, 2025, to take effect for all individuals retired by this time.
- Jul. 10, 2025：
- Ministry of Human Resources and Social Security and Ministry of Finance announced a 2% basic pension payment increase for 2025.
- 2025：
- Pension hike of 2% takes effect; represents the slowest pace of increase on record.
AI generated, for reference only
- CX Weekly Magazine
Jul. 11, 2025, Issue 26
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