Elderly population expected to reach 38% by 2050
Retirement age at 60, the world’s lowest
The Hukou System hinders economic growth
Urbanization rate must reach 75-80%
As China faces complex issues of economic slowdown, low birth rate, and aging population, its status as the world’s second-largest economy is wavering. The Economist recently introduced a solution for China’s population crisis.
The elderly population in China is rapidly increasing. Currently, China’s population over 60 years old is about 297 million, accounting for 21% of the total population. By 2050, the elderly population is expected to increase to 520 million, accounting for 38% of the total population.
The problem is that while the elderly population is increasing, the birth rate is decreasing. Last year, the Chinese population declined for the second consecutive year. The total fertility rate, the expected average number of children born to a woman during her childbearing years, was 1.09 in 2022. This is far below the total fertility rate 2.1 needed for China to maintain a stable age distribution, often represented as a bell-shaped pyramid.
The Economist suggested, “The Chinese government should prioritize finding solutions to the decline in the labor force,” and “Raising the age at which public pensions can start to be received could be a solution.”
Currently, China’s pension-receiving age is one of the lowest in the world. The average retirement age for Chinese men is 60. The retirement age for women is even younger. Women in office jobs retire at 55, while those in factory jobs retire at 50. Bert Hofman, director of the East Asia Institute at the National University of Singapore, predicted, “If elderly people in China participate in the labor force at a level similar to Japan by 2035, about 40 million more people could work.”
A transition to high-value-added industries is also necessary. About a quarter of Chinese workers are engaged in agriculture. In developed countries, less than 3% of the population works in agriculture.
Chinese President Xi Jinping has pledged to activate advanced manufacturing to create high-productivity jobs. However, most new industrial jobs are located in cities. China’s Hukou (household registration) System, which does not allow free migration between regions, could become a stumbling block to economic growth. Alicia García-Herrero, the chief economist at the global investment bank Natixis, pointed out that “China’s urbanization rate is about 65%” and “They should aim for 75-80%.”
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