China’s Ageing Population Presents Economic Opportunities
China is experiencing significant demographic changes, with its elderly population increasing rapidly. By the end of 2022, individuals aged 65 or above comprised 14.9% of the total population, and the elderly-dependency ratio reached 21.8%. Additionally, China has entered a period of negative population growth, with a decline of 850,000 people compared to the previous year. These shifts in population dynamics, which are also occurring in other countries such as Greece, Italy, Portugal, Japan, and South Korea, present both challenges and opportunities for economic development.
As a country develops economically, fertility rates tend to decline as more women pursue higher education and participate in the workforce. This negative population growth leads to a decline in total demand, which could be limiting for countries with smaller populations. However, China’s large population mitigates the impact on overall demand. Nevertheless, the declining working-age population and the rapidly rising ageing population have resulted in a decrease in labor supply, as well as a decline in savings and investment rates, leading to a slower potential growth rate.
To address these challenges, China’s central authorities have proposed implementing a proactive national strategy to address population aging. This strategy focuses on improving labor productivity to offset the negative impact of the declining working-age population. It emphasizes three key areas: improving the quality of the workforce, enhancing the distribution of educational resources, and developing vocational education to build a skilled workforce.
Improving the quality of the workforce involves raising education standards and shifting from an exam-oriented education system to one that emphasizes student cultivation and innovation. The distribution of educational resources must also be improved, particularly between urban and rural areas, to ensure fair opportunities for all students. In addition, the development of vocational education is crucial to meet the demand for skilled workers in the labor market.
Furthermore, it is essential to address employment discrimination and create a fair and equitable environment to ensure that workers are not discriminated against based on gender, age, or other factors. Leveraging digital technology to transform the labor market and improve productivity is also vital. Additionally, policies should be put in place to facilitate the re-entry of the elderly into the labor market, thus harnessing their valuable skills and experience.
Moreover, the ageing population presents opportunities for economic growth through the development of the silver economy. The 14th Five-Year Plan for the Development of Ageing and the Elderly Care Service System emphasizes the integration of the eldercare industry with other sectors, creating new jobs and improving the well-being of the elderly. The combination of community-based and family-based eldercare systems, along with the use of digital technologies in eldercare services, facilitates the overall development of the eldercare industry.
Additionally, integrating healthcare and eldercare services can expedite the development of the healthcare sector, including disease prevention and treatment for chronic illnesses among the elderly. Furthermore, the pension insurance system should be reformed to allow individuals to choose different plans that cater to their specific needs. This would alleviate pressure on the government and society while ensuring a dignified retirement for all.
In conclusion, China’s ageing population and negative population growth present both challenges and opportunities for economic development. By improving the quality of the workforce, enhancing educational resource distribution, developing vocational education, and promoting the silver economy, China can address these demographic changes and drive high-quality development. As the country adapts to these shifts, it can harness the potential of its human resources and create a brighter economic future.
