China’s ageing population

21 Feb

China is entering into a new stage demographically, and it appears as if there will be severely negative consequences should action not be taken. Due to the one child policy in 1979, China is suffering from a much increasing ageing population, different to the other BRICs. It is estimated that by 2050, over 25% of the population will be over 65, being 45 over 65’s to every 100 20-64’s. The one child policy has coupled with China’s modernisation, which in turn has increased life expectancy, increasing the elderly population. There is a 100 year waiting list for a Beijing nursing home, with 10,000 applicants for 1,100 beds. The government wrongly assumed that more people would opt for private elderly care, not governmental funded, which has appeared wrong.


Furthermore, the share of the population above 60 will increase from12.5%, to 20% in 2020, providing China with an exceptionally high dependency ratio. The young fuelled China’s economic growth, but now they are beginning to disappear along with China’s growth. Pensions are also forming a burden on the government, as very few decent pension are available. The government is attempting to set up rural pension schemes, but is it too much too late?  





One Response to “China’s ageing population”

  1. db7g09 March 30, 2013 at 3:16 pm #

    There are concerns that population aging may imperil or slow the pace of economic growth in China. This issue is important in a global context because China’s economy determines the country’s prosperity and has been a driver of world economic growth.

    More specifically, from a macroeconomic perspective, population aging may affect the economy through the following venues. (a) Labour costs may rise while productivity hardly increases, (b) old-age insurance may bear a greater financial burden because the period of benefit payment will be prolonged and the number of pension beneficiaries will be increased, (c) cost of elder care and medical insurance will increase due to longevity and increased the prevalence of chronic diseases, and (d) international investment capital may flow to other countries whose prices, productivity and, therefore, returns are higher. Consequently, this will mean a heavier burden for young taxpayers.

    Mark Frazier, professor of Politics and Co-Academic Director of the India-China Institute at the New School, states that, “Aging and the policies to cope with a ‘graying’ population are first and foremost domestic issues, but, as is so often the case, the consequences of Beijing’s pension policies will resonate far beyond its borders. Those who manage economic relations with China should focus less on trade deficits and exchange rates and spend more time thinking through the long-term implications of aging, and what it will mean for patterns of trade and investment among the world’s largest economies.” I think this is true, and the solution may be in the rural pension plans the Chinese government has introduced. The government introduced a rural pension plan in 2009 and a new urban pension plan in 2011. Before 2009, only 30% of the population had a pension; now, 55% are covered (664 million people). Looking at the numbers, the pension plan appears to be a success – 240 million people have signed up for the rural pension since it was introduced. But pensions vary from city to city, from urban to rural areas, and from public to private sectors. Thus, the question remains as to whether this can ever be an equal system throughout China? And whether the Chinese government are willing to tackle this problem quickly? As jm26g10 points out, the initiatives attempted by the government may be “too much too late”, but the results from 2009, show that the solutions are there.


    Ning Jackie Zhang, ‘China: Awakening Giant Developing Solutions to Population Aging’ (2012) 52(5) The Gerontologist 589–596.

    Beijing Today – ‘Aging China: crisis or opportunity? – Elderly population offers silver lining for investors’ – – 28 January 2011 (accessed 30 March 2013).

    Darren Wee – ‘China’s rocketing elderly population prompts a rethink on pensions’ – – 1 October 2012 (accessed 30 March 2013).

    Mark W. Frazier – ‘What Happens When China Goes “Gray”?’ – – 14 January 2013 (accessed 30 March 2013).

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