China: Population Aging and Economic Growth

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I. INTRODUCTION
II. TREND IN POPULATION AGING IN CHINA
III. INCREASE RATE OF TOTAL AND ELDERLY POPULATION IV. IMPACT OF THE RISING ELDERLY ON ECONOMIC SOCIAL SYSTEMS V. ECONOMIC EFFECTS ON CHINA’S ECONOMY

VI. CURRENT SOCIAL PROGRAMS FOR THE ELDERLY VII. FUTURE SOCIAL PROGRAMS FOR THE ELDERLY VIII. POSSIBLE ECONOMIC IMPACT ON LABOR, FAMILY, AND WORKING-AGE IX. CONCLUSION

INTRODUCTION

Thirty-five years ago the proportion of young and the elderly was six to one. However, during the next thirty-five years the proportion of elderly will be two times greater than the number of young, according to the China Business Times. Although China’s current population is young and its economy is striving at a prosperous rate with enough resource for the aging, by the year 2050, China will face an increasing aging population that will be three times what it is today, resulting in a two to one ratio of working-age adults to retirees, meaning, approximately 1.6 working age adults will support every person aged 65 and above. This change will have economic impact on pension and living standards for seniors as well as working generations to come. This paper attempts to analyze the impact and challenges of an aging population on China’s economy development, and social security system. The points covered will focus on the demographic impact on an aging society and its development since 1950, the proportion of elderly to young population and it dependency which is increasing due to the rapid decline of fertility and mortality over a short time frame, the imbalance effect on China’s social security system and economy. China’s population is aging much faster because of the dramatic fertility declines and increasing longevity of its elder population. According to England, the population age 65 or older increased to approximately7 percent in 2000, and is projected that by 2025, it will represent 13 percent of China’s population and approximately 23 percent by 2050. In order to understand the magnitude of this impact to China, England explain that by the year 2050, the masses of China’s elderly which is 332 million, will be far greater than the combined elderly populations of North America, Europe, Russia, and Japan which is 310 million.

Source: Robert Stowe England, Aging China, p2

Trend in Population Aging in China
A country’s infertility process holds significant power in altering its size and age structure, while affecting its destiny in many ways. After 1964, the fertility rate started to decline significantly from 40.7 percent to 27.7 percent in 1990, representing a 32 percent decline in a period of twenty-five years. Over this same period, the elderly dependency ratio to working-age population increased from 6.4 to 8.4 percent, representing an increase of 2 percent. Over the next twenty-five years through 2015, the ratio of elderly will increase by another 4.3 percent to 12.7 percent. Thereafter, it is projected to increase rapidly through 2050 to 33.2 percent.

According to England, China working-age population (age 15-64) will grow from 861 million to 1,006 million from 2000 to 2025, representing an increase of approximately 17 percent. The workforce growth is expected to slow dramatically in the years following 2010, after the total work-age population reaches 975 million. After 2025 the size of the working-age population will decline to approximately 908 million in 2050. Indication of the aging of the population has already begun as the expected medium age in China in 2010 will be 34.3 and will increase to 40 in 2030. This change in age structure will eventually place China from that of a young society to that of an adult society. Figure 1.0 is a representation of China’s population size and age...
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