Coping with population aging in China

JudithBanisterDirectorofGlobalDemographicsTheConferenceBoard©Copyright2009,TheConferenceBoardCopingwithPopulationAgingInChina2©2009TheConferenceBoard,Inc.HighlightsCausesofPopulationAginginChinaKeyDemographicandEconomicTrendsPopulationAging—China’sDisadvantagesPopulationAging—China’sAdvantagesHowCanChinaCopewithPopulationAging?3©2009TheConferenceBoard,Inc.CausesofPopulationAginginChinaSteepbirthratedeclinesinthe1970s.Continuingfertilitydeclinesinsubsequentdecades.Belowreplacementlevelfertilitysincetheearly1990s.Continuallydecliningmortalityrates,risinglifeexpectancy.Inparticular,ongoingdeclinesinage-specificdeathratesinthelatemiddleageandolderagegroups.4©2009TheConferenceBoard,Inc.FertilityDeclineinChina5©2009TheConferenceBoard,Inc.China:Expectationoflifeatbirthinyears!!!##!$$!%&'#()&'%*&'%*)&''&'')***!+,-./0./1,.2034,5-6,708-69-6,Source:JudithBanister,currentresearchonmortalityandhealthinChina,2009.6©2009TheConferenceBoard,Inc.DecliningDeathRatesforChina’sMenfromtheirLateFortiesthroughallOlderAgeGroups7©2009TheConferenceBoard,Inc.DecliningDeathRatesforChina’sWomenfromtheirLateFortiesthroughallOlderAgeGroups8©2009TheConferenceBoard,Inc.China’sDemographicDividendChina’spopulationintheworkingages15-64:Averyhighproportion,grewfrom67%in1990to71%in2005.Willpeakat72%in2010-2015.By2025,Chinawillstillhave68%ofitspopulationatages15-64.Meanwhile,India’spopulation15-64is64%ofthetotalpopulationtodayandwillreach68%in2025.9©2009TheConferenceBoard,Inc.PopulationconcentratedinworkingagesChinahasademographicwindowofopportunity,whichhasbeenbenefitingChina’seconomyforover2decadesandwillcontinuetodosoforseveralmoredecades.Notonlyischilddependencylowtoday,soisageddependency.Today’selderlycohortsarecomparativelysmall.MostwerebornandraisedbeforethePRCwasfounded,duringwar,invasion,economicdislocation.Therefore,mostofChina’spopulationtodayisintheworkingagegroups.Theytendtobehealthierthantheold,andtheyatleasthavethepotentialtoworkandproduce.LaborforceagegroupshaveincreasedfasterthanChina’stotalpopulationfor3decades.10©2009TheConferenceBoard,Inc.EmploymentChallengesThehugeandgrowingworkingagegroupshaveposedthechallengesofincreasingthenumbersofjobsaswellasraisingjobproductivity.Themostrecentdecade—jobgrowthhasbarelykeptupwithpopulationgrowthinlaborforceages.Productivityperworkerhasincreasedrapidly.Nowwiththeglobaleconomicdownturn,employmentheadachesarefastbecomingsalient.11©2009TheConferenceBoard,Inc.China,LatestDecade:SlowJobsGrowth,FastGrowthinLaborProductivity!#$%&'()*$+,-'./'0,+$12)'$345'6&$/&'+6-)171)8$$42+,./3'8.,2)$%&'()*9$:;;=??@-10123456789WorldWesternEuropeNorthAmerica&OceaniaJapanChinaIndiaOtherAsiaGDP/PersonEmployedEmployment12©2009TheConferenceBoard,Inc.China,2008PopulationStructureChina,2008800006000040000200000200004000060000800000-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485+Population(inthousands)MaleFemaleSource:U.S.CensusBureau,InternationalDataBase13©2009TheConferenceBoard,Inc.PopulationAging—China’sDisadvantages:Notyetahighlydevelopedcountry.Weakpensionandhealthcaresystems,especiallyinthecountryside.Currentandincreasingagingoftheworkforce.Lowurbanretirementagescoupledwithrapidlyrisingnumberofurbanitesintheirfortiesandolder.Elderlyvillagersleftbehindastheirgrownchildrenmigratetourbanareas.14©2009TheConferenceBoard,Inc.PovertyandLivingStandardsChinaisbeinghardhitbytheglobaleconomicdownturn,butithasalreadybeengrowingfastfor3decades.TheWorldBankestimatedthat2005-06percapitaGDPgrowthwas10.1%inChina.ChinanowqualifiesasaMiddleIncomecountry,basedonWorldBankWorldDevelopmentReport2008data.15©2009TheConferenceBoard,Inc.China’sfuturepopulation,laborforceChina’sbirth&deathratesandpopulationgrowthrateareexpectedtostaylowincomingdecades.Shrinkingcohortsofchildrenwillbecomereducednumbersoffutureyoungadults.Chinawillseefurtheragingofitslaborforceagegroups.By2015,thelargecohortsofworkerswillbeintheirfortiesandolder.China’solderworkingagegroups—lowliteracy,educationallevel,lessadaptabletorapidlychangingeconomy.16©2009TheConferenceBoard,Inc.China,ProjectedEconomicallyActivePopulation,2005-2015!!!#!!$!!%!!&!!'!!(!!)!!*!!200520102015YearEconomicallyactivepopulation(millions)Ages15+Ages20-39Ages40-64Source:InternationalLaborOrganization,2006.China,ProjectedEconomicallyActivePopulation,2005-2015Source:InternationalLaborOrganization,2006.17©2009TheConferenceBoard,Inc.China’sElderlyAges60+Age-specificmortalityratesofallelderlyage-sexgroupshavedeclinedby1.1-2.4%peryearsincethemid-1970s.But,especiallywithoutmedicalinsurance,largeproportionsoftheagedmaybeolderbutsicker,withmuchchronicillness&disa