IT’S EASY to be impressed by the China we’ve seen during the Olympics – the glittering, modern buildings; the futuristic maglev trains; the epic public works projects.
On the surface, China has the physical capital of a rising world power. But the structure of China’s human capital presents a very different picture.
Over the next 40 years, China is headed for intense and rapid demographic change: Between now and 2050, China’s population will shrink and become very, very old. There are no easy ways to manage this catastrophic problem.
In 1950, China had 550 million people; today, it is home to 1.3 billion souls. But the rate of population growth has slowed considerably.
According to projections from the United Nations’ Population Division, China’s population will peak at 1.45 billion in 2030. Then it will begin contracting. By 2050, they’ll be down to 1.40 billion and will lose 20 million people every five years.
At the same time, the average age in China will be shooting up. In 2005, China’s median age was 32. By 2050, it will be 45 – which means that an increasing percentage of Chinese will be elderly. By 2025, one in five Chinese will be older than 65. By 2050, that ratio will be 1 in 4.
The takeaway from these grim numbers is that China is going to have 330 million senior citizens with no one to care for them and no way to pay for their care. As demographer Nick Eberstadt sorrowfully observes, it is “a slow-motion humanitarian tragedy already under way.”
How did this happen? For starters, China’s average lifespan has been rising: In 1950, the average age was 42; by 2006, it had stretched to 73, an increase of almost 75 percent in just a few generations.
At the same time, the Chinese fertility rate was dropping. Between 1950 and 1970, the average Chinese woman had roughly six children during her lifetime. But beginning in 1970, the Chinese government began urging a course of “late, long, few” – meaning they wanted people to wait longer to reproduce, to put more space between children and to have fewer babies overall.
In the course of a decade, the fertility rate dropped from 5.9 to 2.9. That still wasn’t enough for the government, which then instituted the One Child Policy (which is more complicated than it sounds).
Under One Child, couples wanting to have a baby were required to first obtain permission from local officials. (In 2002, the government relaxed this provision; you can now have one child without government clearance.)
After having a first child, urban residents and government employees are forbidden from having another, with very few exceptions. In rural areas, however, couples are often allowed to have a second child five years after the first.
Any more than two children, however, and the government begins to penalize you. As the New England Journal of Medicine reports, sanctions can take the form of “substantial fines, confiscation of belongings, and dismissal from work.” (On occasion, there’s forced abortion and sterilization.)
The overall result is a Chinese fertility rate that now sits somewhere between 1.9 and 1.3, depending on who’s doing the tabulating. The rate needed to maintain a stable population is 2.1 – which is why China will start losing bodies in 20 years.
Declining population is a problem for societies and economies. Historically, they do not remain stable when populations contract. But the bigger problem for China is what to do with its elderly.
The government’s pension system is almost nonexistent, and One Child has eliminated the extended family as a support system – which will leave the Chinese with a few very bad options.
There will only be 2.3 workers to support each retiree, so the government will be forced to either: (1) Substantially cut spending in areas such as defense and public works in order to shift resources to care for the elderly; or (2) impose radically higher tax burdens on younger workers to pay for the elderly.
The first option risks China’s international and military ambitions; the second risks revolution.
Of course, there is a third option: The Chinese government could simply send its old people into the countryside to die. It sounds monstrous, but remember that this is a regime that, within living memory, intentionally starved to death between 20 million and 40 million of its own people. What sounds monstrous to our ears is a policy option to others.
The China of the 2008 Olympics is a wonder to behold. The China of tomorrow will be something else altogether.
Between now and 2050, China’s population will shrink and
become very, very old. There are no easy ways to manage this catastrophic problem.