November 15, 2005

THE MIDDLE-AGED KINGDOM:

Old Age Tsunami (Nicholas Eberstadt, November 15, 2005, Wall Street Journal)

China: Of all the impending Third World aging tsunamis, the most massive is set to strike China. Between 2005 and 2025, about two- thirds of China's total population growth will occur in the 65-plus ages--a cohort likely to double in size to roughly 200 million people. By then, China's median age may be higher than America's. Notwithstanding the recent decades of rapid growth, China is still a poor society, with per-capita income not much more than a tenth of the present U.S. level.

How will China support its burgeoning elderly population? Not through the country's existing state pension system: That patchwork, covering less than a fifth of the total Chinese workforce, already has unfunded liabilities exceeding China's current GDP.

Since the government pension system is clearly unsustainable, China's social security system in the future will mainly be the family unit. But the government's continuing antinatal population drive makes the family an ever-frailer construct for old-age support. Where in the early 1990s the average 60-year-old Chinese woman had five children, her counterpart in 2025 will have had fewer than two. No less important, China's retirees face a growing "son deficit." In Chinese tradition it is sons, rather than daughters, upon whom the first duty to care for aged parents falls. By 2025, a third or more of Chinese women approaching retirement age will likely have no living sons.

Paradoxically, despite all China's material progress, the nation's elderly will face a continuing, and quite possibly a growing, need to support themselves through their own labor. But as China's elderly workers tend to be disproportionately unschooled, farm-bound and less well-trained than the general labor force, they are, perversely, the ones who must rely most upon their muscles to earn a living.

On the current trajectory, the graying of China thus threatens many tens of millions of future senior citizens with a penurious and uncertain livelihood in an increasingly successful emerging economy. The looming fault lines for "impoverished aging" promise to magnify yet further the social inequalities with which China is already struggling.


Strike twelve.

Posted by Orrin Judd at November 15, 2005 6:02 PM
Comments

China's difficulties clearly show the sad results of human stupidity. Under the misrule of the Party's wise men, China opened itself up to trade and investment thirty years too late.

Imagine what would have happened if Chiang Kai-shek and not Mao had won the Chinese civil war. It would have been very likely, just as Taiwan did, that a non-Communist China would have joined in the post-WW II economic boom not after the late 1970s, but from the 1950s on. In other words, China today would be facing Eberstadt's coming old age tsunami not with the current per capita income of Communist-ruled China, but with one more like that of democratic Taiwan, whose per capita income is ten times greater. Of course, this didn't happen.

So why are so many people praising China and the Communist Party for finally carrying out an economic policy that should have been put into practice a generation and a half ago?

Posted by: X at November 15, 2005 8:52 PM

A government that embraces it's "one-child" policy on forced abortions -- even to the point of looking the other way in cases of infanticide when a second child is born -- isn't going to see any problem with urging euthanization of its most in-need elderly population to solve the problem of the increased cost of older people on society. Whether or not the current Chinese goernment is still in place to do that 20 years down the line remains to be seen.

Posted by: John at November 15, 2005 11:19 PM

Is it possible that a nation that aborts a million babies per year might feel the same about their elderly who have not provided for their own financial security?

Posted by: tgn at November 16, 2005 12:50 AM

tgn, the old social contract in Communist China was that if you had not been branded a class enemy and did not question the right of the Party to rule, the Party would guarantee you could more or less survive. There was no need for people to provide for their own financial security. That was supposed to be bestowed by the Party. People in the workforce were assigned jobs, and retirees were given subsidized housing and cheap food.

The problem is, this social contract where giving up your human rights in return for economic security doesn't exist anymore. The elderly in China are simply one more group of victims in a long line of victims.

Posted by: X at November 16, 2005 1:44 AM

Sounds like an ideal opportunity for Christian charity.

Posted by: Randall Voth at November 16, 2005 3:35 AM

tgn:

Which nation aborts a million babies per year?

Posted by: Brit at November 16, 2005 6:52 AM

The one with a large black population.

Posted by: oj at November 16, 2005 7:25 AM
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