As early as 2015, China's working age population will actually start falling. By 2040, today's young workers will be pensioners - in fact the world's second largest population, after India, will be Chinese pensioners. There could well be 100m Chinese people aged over 80, more than the current worldwide total, as Richard Jackson and Neil Howe point out in their excellent paper, The Graying of the Middle Kingdom (CSIS 2004).
Because of China's one-child policy there will be fewer new workers under its so-called “4,2,1” population structure -four grandparents, two parents and one child. This is a demographic transition that many countries go through. But a process that is taking a century in the west will take 40 years there. The desperate rush for economic growth is fuelled by fears that China could grow old before it grows rich.
Not so long ago, China was one of the world's most youthful countries, with a median age of 20. Its median age is now estimated at 33. By 2050, the United Nations forecasts, China's median age could be 45, against 43 for the UK and 41 for the US.
Older countries are good at incremental improvements in productivity that come from age and experience. But they are not good at the type of improvement in performance that comes from doing things differently. Radical innovation seems to come from youth.
Another important dimension to all this is that China does not have a strong civil society. What it does have instead is strong family ties. Old people are the responsibility of their families, and about two-thirds of people aged over 65 in China live with their children. Only 1 per cent of those over 80 are in old people's homes, compared with 20 per cent in the US.
Imposing the one-child policy on these long established customs is having an extraordinary effect. If you can have only one child it becomes highly desirable to have a boy. The rule is not as strictly enforced as it was, but you can now see its effect on the second child, which in the eyes of many Chinese really is the last chance to have a boy. For every 100 female second children, there are 152 males. Overall, there are now about 120 boys for every 100 girls in China.
The country is waking up to this extraordinary imbalance. Last year it banned ultrasound testing to try to stop gender-based abortion. But already it means China is facing a world not unlike a traditional Oxbridge college, with far too many men relative to women. That is why we can already read in the media accounts of young women being bribed or even kidnapped from places such as North Korea or Vietnam. China is going to have to attract large-scale female immigration or many of its young men will leave.
Gender balance can shape a society's values. If men are in the majority, their negotiating position is weak and they have to be prudent and hard-working to win a wife. If women are in the majority, it is their negotiating position that is weak and men can get away with being irresponsible and feckless. (One theory about the problems of America's inner cities is that there is a shortage of young men because of large-scale incarceration and high levels of military service.)
So China is going to be full of old people and rather earnest, frustrated young men. It will be one of the most dramatic and unusual demographic changes the world will have seen for a very long time, and Chinese leaders now would do well to plan for such a future.
http://neweconomist.blogs.com/new_economist/2005/11/chinas_demograp.html
Maybe China should give money to their senior citizens in order to expand their domestic economy, and not only inject money into production facilities and export industries.
