Dan Swinhoe (Asia) - The Impact of an Ageing Chinese Population

When you are the most populace country in the world, it may feel like there a few problems you can't solve through people power. But when it comes to reversing three decades worth of population control, is it too little, too late?

After 30 years and an estimated 400 million prevented births, China's one-child policy may finally be on its way out. A new study conducted by the Chinese think-tank China Development Research Foundation (CDRF) urges the government to remove the restrictions, warning that the policy equates to a "demographic time bomb." Gender imbalance, sex-selective terminations and child trafficking that stem from the policy aside, China has the looming crisis of an ageing population on an unprecedented scale to deal with.

An ageing society, according to the UN, is when 7% of its population is over 65 (it was previously 10% aged 60+). Under these rules, China became an ageing society over a decade ago. According to 2011 figures from the government, of the 1.34 billion people in China , 13.7% were aged 60+, and 9% were 65+. That's 185 million people. According to China's National Committee on Ageing, China's elderly already make up 22% of the world's elderly population, and it is expected to increase to 26% by the end of2050. If China's aged were a state, they'd be the fifth most populous country in the world.

An ageing population may be a problem that the world is facing, but the People's Republic faces some unique problems. Not only does it have the sheer number to contend with, but it also has to cope with still being a poor country. China's life expectancy has soared, from around 44 in 1950 to equal that of Western countries today, but without enjoying the same financial security.

Looking after such a population means changes have to come; economic, social and governmental. Just as an example, according to the World Bank, China has enough care home places for around 1.6% of over-60s, compared to an average of 8% in more developed countries. And to counter this, 100 high-tech nursing homes are due to be built over the next 10 years. 

Which leads to another problem; cost. China's welfare state isn't as well developed as other nations, and its pension scheme is facing a crisis. Currently there are six workers paying taxes for each retiree - in 20 years' time, that figure will have dropped to two working adults for every pensioner. A national pensions fund was established in 2000, but only about 365m people have a formal pension, and even then there are severe funding problems.

So if the state can't fund retirement, that leaves the children to. Problem is, the one-child policy has created what is known as the 4-2-1 phenomenon, where the only offspring supports their two parents and four grandparents, who are now living longer. Whether living with the family, or in a home of some sort, supporting a family, education costs for children and trying to meet ever-increasing healthcare costs is at best a struggle, and at worst, completely unsustainable and unrealistic.

Another major impact will be on China's workforce. Currently there are around 980 million people in the active labour force. But this figure is expected to reach its peak in 2015 and then take a nose dive. As workers disappear, wages will rise, which may be good for the workers, but will shatter China's dependence on cheap manufacturing. The government has mapped out the age structure for many jobs, and knows when the skills shortage will hit each occupation, something which may be offset by importing workers, at least for a time.

How the elderly live may need to be changed. Obviously working longer and pushing back the retirement age is an option that many countries have put into place, but that's more a delaying tactic. A large portion of the elderly live in rural areas, making caring for them difficult, which in turn reduces the chance that they can continue to contribute later in life.

Obviously these are a complex set of problems that no one solution can fix. But enabling more than one child per family would be a logical step. However, even doing that could be dangerous. The CDRF's report warns that ending the policy in different areas at the same time will trigger a huge population boom which could cause a completely different set of problems. It instead suggests a two-child policy be permitted in some provinces from this year and nationwide by 2015.

On the other hand, there are those that doubt removing the policy would have any major impact. In 1980 the average number of children per woman was three - today China is a far more developed country than it was when the policy was introduced and traditionally, developed countries have very low birth rates, government intervention or not.

Whatever the Chinese government decides to do, this is a problem that has to be addressed, and quickly. After all, time waits for no man, but there are plenty of men waiting.

By Dan Swinhoe, Editorial Assistant, IDG Connect


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Dan Swinhoe

Dan is a journalist at CSO Online. Previously he was Senior Staff Writer at IDG Connect.

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