China’s Ageing Population

26 Mar

Declining fertility rates and increasing life expectancies has led to a world in which ageing populations have become ever more prevalent (Wolfgang et al., 2008). The median age of the world’s population is expected to increase from 26.6 years in 2000, to 37.3 in 2050 and shockingly 45.6 in 2100 (Wolfgang et al., 2008). Cai et al. (2012) state that by international standards, a population is ageing when it conforms to these 2 criteria: more than 10% of the population is over 60 years of age and more than 7% of the population is over 65. Importantly, population ageing is not simply about there being more old people within a society, it centres more closely on people living longer lives and the subsequent implications of this increased longevity (Wolfgang et al., 2008). Although ageing is occurring globally, nowhere throughout the World is this phenomenon occurring as rapidly as it is in China. A process which has taken over 100 years in countries such as the UK, has taken a mere 40 years within Chinese society (Cai et al., 2012). This has presented not only the government, but smaller societies alike, with a multitude of social and economic problems that are threatening the prosperous development that China has been experiencing since the reform in 1978 (England, 2005).

                When the People’s Republic of China was established in 1949, the life expectancy for men was 42 and for women 45 (England, 2005). Now the WHO (2011) estimates these values to be 74 for men and 77 for women. This rapid ageing of the population has resulted in an upside down population pyramid whereby the increased proportion of people aged over 60 has had a profound effect on the demographic structure of the country (England, 2005). During the 1970s, it was common place for Chinese women to be having as many as 6 children (England, 2005) and since that time there has been a strong focus on implementing population control policies such as the One Child Policy. As a result, population growth in China is very slow. Since 1990, China’s fertility rate is said to have reached that of developed nations (Cai et al., 2012) and if this low fertility rate continues, China will begin to experience negative growth rates and by the end of the 21st Century, its population is estimated to fall to 940 million. Between the years of 2000 and 2010, Chinese population only increased by 73.9 million, an annual rate of 0.57% compared to 1.07% the previous decade (OECD, 2013). However, the growth of the world’s population occurred at more than twice that speed (CDRF, 2012) rendering it is easy to see why an ageing population is occurring so rapidly.

                There are many social implications resulting from this ageing. Firstly, due to the fact that the elderly population over 60 rose from 7.6% to 13.3% between 1982 and 2010 (OECD, 2013), China is getting old before it is getting rich. This population ageing increases the level of family burden, that is to say that the younger generation are having to look after an increasing amount of elderly. This is made worse by the notion of the 4-2-1 effect created by the implementation of the One Child Policy (OECD, 2013). It is now common place for one single child to have to look after 2 parents and 4 grandparents. This creates a shift in intergenerational relations whereby instead of complete family care, there is weakened family support and a reliance on social support, which is less personal (Bloom et al., 2010).

                Cai et al. (2012) highlights the issue of “hollowing” out of villages. This means that the young professional population migrate to the cities in search of employment and leave behind the elderly population. This puts into question the elderly falling into poverty and being unable to escape it. This is especially true of rural areas where households with an elder as the head are more likely to be poor (Long et al., 2012). The income poverty rate for households with a head age of 71-80 was 15% in 2004, compared to that of 8.5% for households with a head of working age (Cai et al., 2012).

                There are also several economic impacts that have manifested as a result of the ageing population. Firstly, the rapid demographic shift has led to a decrease in the number of people within the working age (Cai et al., 2012). The population aged between 18-22 fell from 124 million in 2008 to 108 million in 2011 (OECD,2013) showing that the number of newcomers to the labour market is rapidly decreasing. As a result of this, labour costs will rise, undermining the competitive economic advantage China has spent so long building (England, 2005). This increased burden on the working population (Cai et al., 2012) is shown through the growing value of China’s dependency ratio which is expected to reach 0.8 in 2011, meaning that for every 4 working people they will have to support at least 2 elders and 1 child (OECD, 2013).

                Moreover, it has been suggested by the OECD (2013) that China simply isn’t prepared financially for this rapidly ageing population. Public spending on old age is limited, yet the demands of the Chinese elderly for social support and medical care is forever increasing (OECD, 2013). In addition, finances that would otherwise be spent on expanding the economy now have to fund lifestyles of the elderly. This could include home helps, bus passes and other day to day activities (Bloom et al., 2010).

                To conclude, this brief analysis into the background to China’s ageing population has highlighted its major social and economic implications. Evidently, there is a need for the implementation of policies geared towards the elderly, for example pension schemes such as the New Rural Social Pension Scheme (Help Age International, 2013) and a focus on the development of the new “silver industries and white economies”. China must deal with this problem appropriately, and not simply sweep it under the carpet.

 

References

Bloom, D. E., Canning, D., Günther, F. (2010) Implications of population ageing for

economic growth. Oxford Review of Economic Policy, 26(4): 583-612

 

England, R. S. (2005) Aging China. The Demographic Challenge to China’s Economic

Prospects. Westport: Praeger.

 

Cai, F., Giles, J., O’Keefe, P., Wang, D. (eds) (2012), The elderly and old-age support in rural China. Washington DC: World Bank

 

Help Age International (2013) Pension Coverage in China and the expansion of the

New Rural Pension Scheme. Briefing no. 11

 

OECD (2013) The Silver and White Economy: The Chinese Demographic Challenge. Available: http://www.oecd.org/employment/leed/OECD-China-report-Final.pdf. [Last accessed 24th March 2014]

 

WHO. (2011). China Country Profile. Available: http://www.who.int/countries/chn/en/. [Last accessed 25th March 2014]

 

Wolfgang, L., Sanderson, W. and Scherbov, S. (2008) The coming acceleration of global population ageing. Nature: 451, 716-719

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