China's Demographic Destiny and Its Economic Implications: Population Changes Will Impact China's Long-Term Economic Growth and Global Competitiveness

By Waldman, Cliff | Business Economics, October 2005 | Go to article overview

China's Demographic Destiny and Its Economic Implications: Population Changes Will Impact China's Long-Term Economic Growth and Global Competitiveness


Waldman, Cliff, Business Economics


China appears to be at the edge of an historic demographic transition, setting the country on a path to grow old before it becomes prosperous. This paper presents a detailed picture of the current population dynamic and analyzes the implications for economic prospects. The results indicate that China is not yet at the stage of development where population changes matter a great deal for economic growth. But when that time comes, perhaps in a decade or so, demographic changes will have a profound influence not only on economic growth but on China's global competitiveness.

**********

Population dynamics in general and aging in particular have become global economic issues. At a Federal Reserve Bank of Kansas City symposium on global demographic change, a paper presented by Bloom and Canning (2004), two researchers from the Harvard School of Public Health, offered a number of daunting facts. The segment of the global population that is age 60-and-older is rising sharply both in percentage terms and absolute numbers, with the expectation that it will surpass one billion within two decades. Moreover, the population age 80 and over is projected to increase at an annual rate of 3.4 percent from 2000 to 2050, corresponding to an increase from one percent to four percent of the global population.

This aging phenomenon, it is believed, will be most rapid in Western Europe, the United States, and Japan, Virtually all of the projected increase in world population through 2050 will occur among today's lower- and middle-income countries. China, however, might be one important exception.

As the world's most populous country, whose rapid economic growth and stellar foreign direct investment have turned it into an emerging economic superpower, China appears to be at the edge of its own historic population transition. As noted in a recent paper published by the Center for Strategic and International Studies (CSIS) in Washington, DC (Jackson and Howe, 2004), the United Nations (UN) projects that the share of China's population age 60-and-over will rise to 28 percent by 2040 from 11 percent in 2004. As the authors point out, by 2040, assuming current demographic trends continue, there will be 397 million Chinese citizens who are in the 60 and older age cohort, more than the total current populations of France, Germany, Italy, Japan, and the United Kingdom, combined.

A number of authors have commented on the Chinese demographic transition as it relates to pension policy. The CSIS study, for example, points out that without pension reform, China will "soon have tens of millions of indigent elders who lack nearby families, pensions, and access to health care" (Jackson and Howe, 2004, p. 27). But the more fundamental question, one that should be considered before any analysis of the pension issue, is the impact of the demographic dynamic on long-term economic growth. The economic growth impact of population changes can dramatically affect pension policy and pension financial status. Further, given China's widening income distribution and bleak job market, the consequences of a structural, long-term slowdown in economic growth, should that occur, could be significant not only from an economic perspective but for its social and political consequences, as well.

This paper is part of an emerging literature on China's demographic transition, presenting a detailed picture of the current population dynamic and considering the implications for long-term economic growth. The next section reviews recent literature on the demographic-economic nexus and proposes a dynamic paradigm for analyzing the relationship.

The third section of the paper reviews recent demographic trends from three vantage points. First, I present data for a number of aggregate population variables in order to assess the general trend in population growth and age distribution, two variables that will be shown to have significant consequences for savings, labor supply, and economic development. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

China's Demographic Destiny and Its Economic Implications: Population Changes Will Impact China's Long-Term Economic Growth and Global Competitiveness
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.