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

When you are the m ost populace country in the world, it may feel like there a fewprob lem s you can't solve through

eople power. But when it com es to reversing three decades worth of population control, is it too little, too late?

After 30 years and an estim ated 400 mi llion prevented b irths, China's one-chi ld pol icy may finally b e 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 po licy equates to a "demographic time b omb." Gender

imb alance, sex-selective terminations and child trafficking that stem from the policy aside, China has the loom ing

crisis of an ageing population on an unprecedented scale to deal with.

An ageing society, according to the U N, is when 7% of its population is over 65 (i t was previously 10% aged 60+).

Under these rules, China became an age ing 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 mil lion

eople. According to China's National Commi ttee 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 b e

the fifth most populous country in the world.

An ageing population m ay be a prob lem that the world is facing , but the People's Repub lic faces some unique

roblems. Not only does it have the sheer number to contend with, but it also has to cope with still be ing a poor

country. China's life expectancy has soared, from around 44 i n 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; econom ic, 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 m ore developed countries. And to counter this, 100 high-tech nursing hom es

are due to be bu ilt over the next 10 years.

Which leads to another prob lem; cost. China's welfare state isn't as well developed as o ther nations, and its

ension 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 fundingprob lem s.

So if the state can't fund retirement, that leaves the children to. Problem i s, the one-child poli cy has created what is

known as the 4-2-1 phenom enon, where the only o ffspring supports their two parents and four grandparents, whoare now living longer. Whether living with the family, or in a home of som e sort, supporting a fami ly, 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 mi llion peop le in the active

lab our force. But this figure is expected to reach its peak in 2015 and then take a nose dive. As workers disappear,

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wages will rise, which may be good for the workers, but will shatter China's dependence on cheap manufacturing.

The government has m apped ou t the age structure for many job s, and knows when the skills shortage will hit each

occupation, something which may b e 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, bu t that's more a de laying tactic. A large portion of the elderly

live in ruralareas, 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 problem s that no one solution can fix. But enabl ing more than one child per

family would b e a logi cal step. However, even doing that could b e dangerous. The CDRF's report warns that

ending the pol icy in different areas at the same time will trigger a huge population boom which could cause a

completely different set of problem s. It instead suggests a two-child policy b e permi tted in some provinces from

this year and nationwide by 2015.

On the other hand, there are those thatdoubtremoving the policy would have any majo r impact. In 1980 the

average num ber o f children per woman was three - today China is a far more developed coun try than it was when

the policy was introduced and traditionally, developed countries have very low birth rates, government intervention

or not.

Whatever the Chinese governm ent 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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