China's labor market is expected to reach a turning point in 2013 as a result of the family planning policy and the aging population, the Allianz Group said in a recent report.

The latest census data shows that China's average annual population growth during the last decade fell to 0.6 percent from the 1.1 percent during 1990s, the Allianz Demographic Pulse said.

Judging from China's current retirement age (50 or 55 for women, 60 for men), there are 18 people aged 60 and over for every 100 in the labor force aged 15 to 59. This ratio will reach as high as 64 to 100 by 2050.

If China sticks to its current retirement age, the number of 15 to 59-year-olds will peak at around 920 million people in 2013, and decline gradually from there on, the report said. 

Even if China lifted the family planning policy, the decline in the workforce potential could be alleviated but no longer prevented, said Michael Heise, the chief economist and head of corporate development at Allianz.

"It is therefore all the more important to establish a demographically sustainable social system as a matter of urgency, in which capital-funded private provisions play a key role," said Heise.

He suggested China increase the retirement age to 65 years, thus delaying the demographic turning point and significantly lowering the age ratio in the long term.