China is aging fast




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China is aging fast
By Benjamin Robertson, Makka Time
October 14, 2003

Sipping a Corona on a Friday evening, Shirley Wu is typical of her generation of Chinese young urban professionals. In her late twenties she outlines her plans for the evening, a meal with friends, some drinks in a bar and then either returns home or goes to a club.

She has no qualms about admitting that she lives for the moment. So when the question is raised of saving for retirement the response is predictably curt.

With money in her pocket, life is all about now, but recent research published by the Chinese government might give her cause for thought.

The newly established State Family Planning and Population Commission have brought out a report that highlights a long-term demographic trend that could have far reaching consequences.

China ’s population is rapidly aging.

Statistics vary but UN figures report over 65 year olds making up 23% of the total population by 2050, as opposed to 7% in 2000.

The resulting effect on the labor market will mean that the ratio of working age people to support each over 65 will change from today’s 5 to 1 to 3 to 1 by 2050.

This in a country where economic transitions have blurred the once guaranteed pension allowance and where many people have only the one child to support them.

Falling fertility rates

‘‘There are several reasons for this happening,’’ explains Siri Tellier, UN Population Fund representative in Beijing . ‘‘Falling fertility rates and longer life expectancy, which in turn may be caused by a combination of increased contraception, continual economic development, and better female education and employment opportunities.’’

Quick to point out that the one child policy is a misnomer – actual rates vary from 1 to 4 children depending on whether you live in rural or urban areas, whether you are from a minority group and whether your first child was either female or handicapped at birth – the primary reason according to Siri Tellier is falling fertility levels.

‘‘It is difficult to know what would happen if the (one child) policy were to be adjusted, these days people clearly want fewer children than they did a few decades ago,’’ she says.

In 1950 the average rate was 6 children per family, now it is 1.8. In the cities, trends are mirroring the West with both male and female preferring to work first and marry later.

Developments in health mean both lower infant mortality and improved contraception allow for enhanced family planning, nor is there the need in rural areas to use children as part of the workforce as was the case pre mechanisation.

Selective abortions

Further discrepancies exist in relation to the male/female ratio, an issue that was publicly raised by the government in early September. Their estimates put the current birth ratio as being 116.9 boys to 100 girls.

Whether the much hinted at question of selective abortions is to blame is unclear but a traditional preference for male offspring appears to be having an effect. By 2010, there will be 42 million more males than females.

Whereas in the West large-scale immigration is seen as a practical answer to balance an aging population, the development levels and sheer scale of China simply prohibits similar actions.

‘‘It is worrying for many people, particularly in the countryside. They worry about whether their children can support them, especially with medical costs,’’ says Professor Du Deng, Deputy Director of People’s University Population Research Institute.

‘‘For many people there is the question of the 4-2-1 structure,’ he adds referring to the family structure of 4 grandparents, 2 parents and one child who will have to help support not just their own but also their spouses relatives as well as raise their own family.

‘In a country where filial piety is still very strong it could be difficult for everyone.’’

A demographic bonus

‘‘There is nothing inherently wrong with having an old population…it is only bad if you don’t prepare,’’ cautioned Siri Tellier.

‘‘ China will in fact experience a demographic bonus in the coming decade as the number of bread eaters to breadwinners will fall. This will, however, come to an end. What we will see instead as the population ages will be fewer workers leading to fewer children, eventually developing into fewer old people…there does need to be this process of population stability.’’

The projection is that by 2050, China ’s total population figure will be declining.

For those that face the so-called 4-2-1 scenario though, the future will be challenging. ‘‘The biggest problem is in the rural areas,’’ says Du Deng.

‘‘There needs to be a comprehensive expansion of the social security system there. Right now, people rely on remittances sent back from offspring in the cities but that may not be enough, nor are there decent services available where this money can be used.’’

A revamp of the pension system will also be needed to deal with the large number of unmarried men who will most likely never have children. Either a State run, or more likely, market based system will still need input from the working aged populace whose numbers will have decreased in relation to those retired.

Greater involvement of women

Answers being considered include raising the retirement ages (currently women retire at 55 compared to 60 for men), encouraging greater involvement of women in the labour force and reassessing the length of study time children and students undertake.

‘‘Recent developments show the government is now paying attention to the issue; we can expect to see some changes,’’ says Du Deng.

For Shirley’s companion, though, the situation is clear. ‘‘Save for retirement? People today are either too busy out enjoying themselves or too busy finding food for tomorrow’s lunch to worry about what will happen in forty years.