In a technology park in Shanghai's Xuhui district, 58-year-old Zhang Wei is fine-tuning a drone used for agricultural inspection. With 35 years of experience as an aircraft mechanic, he remains one of the most reliable technicians in the factory. Under China's previous retirement framework, however, Zhang would soon be expected to step aside, begin drawing a pension and leave the workforce.

But Zhang is not ready to hang up his boots. "This is when experience matters most," he says. "If I could delay drawing my pension and keep working in some capacity, I could still create value."

His story reflects a broader transformation under way in China. As the country enters the 15th Five-Year Plan period (2026-30), population policy is moving beyond a focus on sheer numbers toward high-quality population development. With rapid aging, social security reform is no longer just about fiscal sustainability. It is increasingly about how to redefine old age, mobilize experience, and turn demographic pressure into what policymakers now call a "silver dividend".

For decades, China's retirement system followed a rigid, one-size-fits-all model. Mandatory retirement ages created a clear boundary between work and retirement, regardless of individual health, skills or preferences. This effectively sidelined many capable older workers while leaving employers short of experienced labor.

But demographics have made this approach untenable. By the end of 2025, nearly 323 million Chinese citizens were aged 60 or above. With life expectancy now at 79 years, retiring at 60 can mean almost two decades outside the workforce. For many older adults, this no longer reflects their health conditions or personal aspirations.

In September 2024, China formally launched a reform to gradually raise the statutory retirement age. The intent was not simply to extend working years, but to introduce greater flexibility by gradually adjusting retirement and pension arrangements.

This is a significant shift. For individuals, it restores agency: retirement becomes a decision rather than an administrative cutoff. For the pension system, delayed retirement eases fiscal pressure while preserving human capital. In effect, reform treats experience as an asset rather than a liability.

If pension provides income security, medical insurance serves as a policy lever for improving population quality. One notable change in recent reforms is a move from a system centered on treatment to one focused on maintaining good health.

This distinction is critical in an aging society, where uncontrolled chronic ailments are often the main driver of soaring healthcare costs. In Hangzhou, local authorities are piloting payment models that allocate medical insurance funds upfront for preventive services, including regular check-ups and chronic disease management at the community level.

The logic is straightforward: investing earlier in health reduces expensive hospitalization later. This approach extends healthy life expectancy while improving the long-term sustainability of medical insurance funds. More broadly, it reflects a shift in policy priorities — from paying for illness to managing health across the life course of the individual.

No discussion of aging is complete without addressing the "sandwich generation". Li Ting, a 35-year-old project manager in Beijing, juggles a demanding job, a school-age child, and a father recovering from surgery.

"There are days I want to quit," she admits. "If social insurance could take care of my father's daily needs, I could focus on my work — and even consider having a second child."

Her predicament highlights another quiet but crucial reform: long-term care insurance. Often called China's "sixth social insurance," it is being piloted in several cities across the country. Its function is not simply to provide cash, but to purchase professional care services when elderly people become disabled.

The macroeconomic logic is compelling. As the working-age population shrinks, China cannot afford to have millions of prime-age workers exit the labor market to provide full-time family care. By socializing care responsibilities, long-term care insurance effectively protects productivity. What appears to be welfare is, in fact, a labor-market stabilizer. Its nationwide expansion during the 15th Five-Year Plan period is widely anticipated.

Internationally, aging societies often struggle to balance social protection with fiscal discipline. China's approach emphasizes a clear distinction between basic guarantees and supplementary provision.

The basic pension system prioritizes minimum security and broad coverage. Supplementary pillars — enterprise annuities, occupational pensions and personal pension accounts — are designed to reward long-term contributions. The recently introduced personal pension scheme, though modest in scale, signals a policy direction that encourages individuals to plan for retirement over the life cycle.

This multi-pillar structure reflects a deliberate effort to avoid welfare dependency while maintaining social stability. The state provides a floor, not a fully furnished retirement.

For Zhang, these reforms may soon offer a third option between full-time work and full retirement. Flexible retirement could allow him to consult part-time, draw a partial pension and remain economically active. His children, freed from caregiving obligations by long-term care insurance, would be better positioned to pursue their own careers.

This is the objective of China's evolving social security system: not simply to manage aging, but to adapt to it. High-quality population development does not mean resisting demographic change. It means ensuring that, in an older society, experience is valued, health is protected, and work and retirement are no longer treated as mutually exclusive.

For international observers, China's experiment offers more than a case study in pension reform. It provides insight into how a large, rapidly aging society is attempting to reconcile longevity with growth — and how a country accustomed to long-term planning is learning how to grow old with purpose.

The author is a member of the 14th National Committee of the Chinese People's Political Consultative Conference and the dean of the School of Insurance at the University of International Business and Economics.

The views don't necessarily reflect those of China Daily.

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