China’s Aging Population: The Global Ramifications
China’s population is aging and shrinking, with the elderly now making up nearly a fifth of the population. This puts pressure on the younger generation and could lead to economic stagnation similar to what Japan experienced in the 1990s. Experts warn that China’s economy will need to rely on productivity growth instead of a low-cost labor force to maintain its pace of expansion.
The Chinese economy is currently facing difficulties, with a growth rate of only 3% in 2022, one of the lowest in decades, caused by prolonged Covid-19 lockdowns and a significant decline in the real estate sector. The reduction in the workforce could make the recovery process even more challenging as China eases travel restrictions and abandons previous strict regulations.
Furthermore, there are several social implications as well. The country’s social security system is expected to face pressure as there will be a lack of workers to support pensions and healthcare, as the demand for these services increases due to the aging population. Additionally, there will be fewer individuals available to take care of the elderly, with many young adults already occupied with supporting their parents and grandparents.
What the China federal government is doing
Chinese authorities have increased their endeavors to persuade larger families, through a program released last year that aims to improve maternal leave and offer tax exemptions and other benefits to families. The President of China, Xi Jinping, pledged in October to “enhance the population development strategy” and reduce the financial burden on families. He said “We will establish a policy system to boost birth rates, and lower the costs of pregnancy and childbirth, raising children, and education. We will implement a proactive national strategy in response to population aging, establish elderly care programs and services, and provide better services for elderly people who live alone.”
In an attempt to increase birth rates, certain areas are offering financial incentives. One community in southern Guangdong province announced that they would pay permanent residents with infants under 2 and a half years of age up to $510 per month – which can total more than $15,000 per child. Other regions have provided housing subsidies to couples with multiple children. However, these efforts have yet to yield desired results, with many experts and locals stating that more extensive national reforms are necessary.
After the recent news, a hashtag trended on Weibo, China’s equivalent to Twitter, read “To promote childbirth, you must first address the concerns of young people.” One Weibo user wrote “Our salaries are low, rent is high and financial stress is heavy. My future husband will work overtime until 3 am every day until the end of the year. My survival and health are already problems, let alone having children.”