Magazine article Insight on the News

New China Grows Old

Magazine article Insight on the News

New China Grows Old

Article excerpt

With the birthrate dropping and life expectancy rising, China may become the first nation to grow old before it grows rich.

The United Nations defines an aging society as one with 7 percent or more of its population older than age 65. China will hit 6.9 percent this year and climb to 13.5 percent by 2025. In other words, nearly 200 million people in China will be 65 or older in a quarter-century. With a low income per capita and incomplete pension system, China faces a more severe demographic problem than the developed countries -- many of which have expressed angst about their projected futures.

"Aging in China is inevitable unless there is a catastrophe to forestall the trend" says Nicholas Eberstadt, an expert in Asian demographics at the American Enterprise Institute. "China is said to age more rapidly than virtually any country in the world. Now, China is younger than the United States; in 2025, China will be as gray as the U.S." with half of both populations older than 40.

The Chinese government realizes the urgency of building a social-security system. The government has been working hard to build a multilevel pension system where funds will be jointly paid for by the state, enterprises and individuals. But restructuring the pension system will be a Herculean task. According to a report by the People's Daily, the country's official national newspaper, the Chinese government needs at least 1.8 trillion yuan ($217 billion) to pay off its obligations under the old pension system.

China's 1979 "one-child policy," while effectively curbing population growth, directly contributed to its aging problem. The government expected the family-planning measure would raise living standards and it was enforced stringently. Fertility declined more dramatically than in any other country in the history of humankind, according to Shen Yimin of the Population and Environment Society of China. …

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