Dear Focus Reader,

Last week, China announced its decision to raise the retirement age for the first time since the 1950s, a move aimed at addressing the country's aging population and shrinking pension funds. Beginning in 2025, the statutory retirement age will gradually increase over the next 15 years. The policy marks a significant shift for China, whose current retirement ages are among the lowest globally.

The decision comes as China grapples with demographic challenges, marked by declining birth rates and an increasingly older population. By 2040, nearly a third of China's population is expected to be over 60, putting pressure on the nation's social safety nets. It's anticipated that extending the retirement age will help alleviate some of this financial strain, ensuring a more sustainable workforce and pension system.

In addition to the retirement age reform, China is also exploring further measures to boost its labor force and sustain long-term economic growth. These include encouraging later-life employment, enhancing vocational training programs for older workers, and offering incentives for families to have more children.

Meanwhile, U.S. officials traveled to Beijing this week for the second meeting of the U.S.-China Economic Working Group (EWG), where they discussed economic concerns affecting both nations. The two-day meeting touched on domestic macroeconomic outlooks, including allegations of China's overcapacity and non-market practices in certain sectors, which have drawn criticism from U.S. firms. They also addressed areas for cooperation, such as debt issues and financing challenges in emerging and developing economies. U.S. officials stressed that the EWG remains a critical platform for addressing shared challenges and fostering cooperation between the world's two largest economies.