The population bubble created by Mao Zedong is becoming a wave of pensioners, as China’s current population – limited by a one-child policy – might not be able to sustain that grey gulf. Analyst Paul French takes a peek at the country’s demographic abyss for the EastAsiaForum.
Auguste Comte, the father of sociology, famously said that ‘demographics is destiny’. China now has an ageing population. The National Bureau of Statistics estimates that by 2015 there will be some 200 million Chinese people over 60, increasing to 300 million by 2030, and perhaps as many as 480 million by 2050…
Chinese society does seem to be starting to respond to its ageing demographics. The government is slowly reforming the pension system while the savings rate remains high partly due to saving for retirement, or because people are setting aside funds to look after parents in their old age. Senior citizens’ homes and care facilities have started to appear, overwhelmingly in the private sector.
Despite this, old age will increasingly be a major strain on the Chinese economy. At a time when the government is seeking to boost personal consumption, increasing amounts of income and savings will have to be diverted into care for the elderly, geriatric healthcare and medicines. While the quality of life of China’s elderly will become a key ‘quality of national life’ indicator, the strain on family budgets will also see the cost of old age trickle down the system, forcing many to make hard choices between, say, paying for their child’s overseas education or their parents’ care.
China cannot escape its demographic bind. All China can do is realise it and make the best preparations possible. Providing quality of life for China’s elderly will require the current economic reforms to successfully create jobs, maintain wage rises, allow for continued savings and permit a more regulated and participatory tax base to allow for additional government spending on geriatric care. It is impossible to divorce China’s demographics from its macroeconomics—a secure and pleasant old age will, for most Chinese, depend on continued economic growth.