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China Faces Aging Dilemma
Zheng Li, The China Daily
China
August 23, 2004
China, the world's most populous country, is now crowned with another title: one of the world's most rapidly aging nations.
According to statistics from the National Population and Family Planning Commission (NPFPC), the country's top population policymaker, residents who are 65 or older already accounted for 7.1 percent of the overall population at the end of 2001.
This figure is projected to shoot up dramatically in the decades immediately ahead.
The commission predicts the proportion of the population 65 or older will surge to 24 percent by 2050.
If translated into absolute numbers, that means China will boast a staggering 400 million elderly over 65 by around 2050.
Meanwhile, China's median age is set to advance substantially from about 30 in 2000 to around 39 by 2025. That will be higher than that in the United States, according to U.N. Population Division projections.
The ongoing tempo of aging in China is far faster than that witnessed in more developed regions during the past three decades.
Declining fertility rates, partly the result of national family planning policies, and lengthening life expectancies are the two main factors behind the fast-growing aging population.
"China is now a country with a low fertility rate with its total rate consistently below the sub-replacement level since 1990," said Yu Xuejun, director of the Policy and Regulation Department at the NPFPC.
Meanwhile, the national average life expectancy grew from a mere 41 years in 1950 to 70 years in 2000.
China's rapid aging is rivaled only by its Asian neighbor, Japan.
However, there is a marked difference between China and already developed Japan or other such developed countries with their respective aging populations.
Simply put, Japan became rich well before it was troubled with an aging society.
But never in history has such a big developing country like China experienced a population in an aging phase while it is still not economically better off.
For example, when Japan had the same proportion of elderly as China did in 2000, its per capita economic output was three times higher than China's is now.
"China's situation is accompanied by persistent employment pressures and a patchy social security system, and this is all unfolding while it is still an economically developing country," said Zhang Xiulan, a professor of social development and public policy at Beijing Normal University.
The prospective situation is unsettling: a mammoth developing country coping with a rapidly aging population without the proper planning yet in place to handle all the issues it presents.
This portends many social problems if it is not handled properly and and in a timely manner.
"The biggest challenge China faces is how to handle the problem between its still low productivity level and the population aging," says Hu Angang, a leading economist in China.
"The shrinking ranks of the labor force, competition for capital, and the rising tax burden may force China to rethink its current development model," said Hu, who is a professor at Tsinghua University.
China must urgently bolster its inadequate social security and healthcare systems, which are poorly funded at present, Hu said.
Although China began to establish a social security system in 1997, the system is still not yet up to the speed.
By the end of 2002, the social security umbrella covered only 14 percent of all the work force, of which almost all were urban workers.
Without a sufficient pension system, families still represent the last resort for most aging Chinese today. But with elders swelling the ranks, mounting pressure is already weighing heavily on Chinese families.
For example, as a result of the family-planning policy, the phenomenon in which one couple has to support four elderly parents has become more and more common.
And with life expectancy expected to rise as medical advances continue and living standards improve, the elderly who believe they are entitled to support may increase to include grandparents.
Without a viable pension system, problems are certain to arise. Just who will take care of seniors who have no children or those whose children cannot afford to pay their parents' way or refuse to take care of them?
Although the aging population means less employment pressure for the government, it also means the ratio of elderly supported by the work force will soar, which may have to be addressed by increasing the tax burden on the work force.
Besides racing against time to improve the current frail social security system, other options are also available to tackle the looming problems, experts say.
Raising the retirement age may be one of them.
"While other countries are pushing the retirement age to 65 or above, China's average age is relatively low, 60 for men and 55 for women," said Zhang Xiulan, the public policy expert.
And as a developing country with low productivity, investment in human resources should be enhanced.
"Public financial backing for education and healthcare efforts for rural residents and migrating populations is not only crucial to maintaining robust economic development but also hold the key to defusing the mounting pressure from the aging population," Zhang wrote in an article.
Rising productivity could, to some extent, offset the negative impact of the declining labor force.
At the same time, it may well be time to modify the current family planning policy in line with the changing social and economic conditions facing the nation.
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