Japan Demographics: Low birth rates, ageing problem challenge Japan

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Japan saw a record low birth rate last year, with births of only some 920-thousand. Together with a large aging population, that deepens challenges to the country's social and economic future. CGTN correspondent Terrence Terashima has more.

Japan is home to the most aged society in the world. Some even call it a super-aging society, where almost a third of the population is 65 and above. With declining birth rates and the world's highest life expectancy, Japan's old-age dependency ratio is set to rise rapidly.

TERRENCE TERASHIMA TOKYO "Japan's demographic challenges pose an obstacle to Prime Minister Shinzo Abe's efforts to reignite economic growth. They also put a strain on social security programs. Some analysts say raising the consumption tax in October is merely a temporary solution."

It's not just a matter of expanding social security costs. Elderly citizens now have fewer people to rely on for economic output, tax revenue, as well as physical and emotional care.

One-point-eight people aged 25 to 64 have to support each person aged 65 and over. Some worry about a possible financial collapse.

PROFESSOR HISAKAZU KATO MEIJI UNIVERSITY "We cannot deny the possibility of a financial collapse, but it will be manageable with the right policy. Some economists suggest we should increase fiscal spending to revive the economy, but we do have to be careful in maintaining fiscal consolidation to prevent a financial collapse."

Younger generations are worried that they, in turn, may not be able to receive pensions when they grow old as the budget for nursing care is expected to climb to 20 trillion yen.

PROFESSOR HISAKAZU KATO MEIJI UNIVERSITY "I think the current pension schemes are sustainable as long as people pay diligently. It may be lower than one might hope, but there's still a prospect of getting pension. However, each person also has to think about personal savings."

A government report shows that, by 2060, the labor force will go down to 37 million people from its current 65 million people. Experts say strengthening the labor force is essential as Japan can no longer rely on debts to support social security expenses.

Terrence Terashima, CGTN, Tokyo.