By Robert Lawrence Kuhn
China is getting broadly old before getting broadly rich. That’s a dark, demographic cloud on the socio-economic horizon. In 20 years, China’s elderly will double from 10% to over 20% of the population. By 2050, 330 million Chinese will be over age 65, and China’s “dependency ratio” for retirees could exceed 40%. This means that there would be only (roughly) two working adults bearing the full burden of supporting one senior citizen. A typical young working couple will have to support four elderly parents, putting unprecedented pressure on the family bonds that hold society together. Adding the number of children below 15, the dependency ratio could reach 70 percent — and there is insufficient wealth to create a national safety net.
The demographic advantages that China enjoyed for decades — a young workforce that catapulted China to the world’s second largest economy — is now over. A shrinking work force does not augur well for the country’s economy. Is China ready for its rapid greying? What are the economic and social consequences? How to care for hundreds of millions of elderly citizens? Pointedly, tragically, in the throes of the novel coronavirus epidemic, it is the elderly who are suffering.
Residents singing at the Beijing Yanyuan community for senior citizens on December 5, 2018. /VCG Photo
Chinese culture has long revered the elderly and now China must figure out how to provide a sustainable system of social services to care for them. The vitality of the Chinese economy, and the decency of Chinese society, depends on it. What to do? One obvious solution is not working as hoped. In late 2015, China adjusted its family planning policy, marking an end to its decades-old one-child policy. However, new births in China fell to just over 15 million in 2018, compared to almost 18 million in 2016. Women are working; children are expensive — China’s fertility rate has dropped from 2.8 to 1.7, portending a declining population.
What to do? I highlight three government initiatives: First, raise retirement ages, now 60 for men and 50 to 55 for women — a contentious issue. As people live longer, they should want to work longer, contributing to society and enhancing personal fulfillment. Second, encourage the market to develop innovative services — create profit incentives to provide quality elderly care. Third, cultivate robotic and telecommunication technologies for providing partial care. For China to be China, it must take care of its elderly. For China to become a fully modernized country, its aging population may be its Number 1 economic problem.
