We all know European country has the problem of population aging but do you know which country has the most serious population aging?
In terms of the proportion of the population aged 65 and above to the total population, the highest proportions are in Italy (24.0%), Portugal (24.0%), Bulgaria (23.5%), Finland (23.3%), Greece (23.0%) and Croatia (22.7%), while the lowest proportions are in Luxembourg (14.9%) and Ireland (15.2%).
Today,China faces the same problem.
China has entered a "deep aging" stage, with an aging rate that ranks among the highest in the world, and is being exacerbated by a declining birthrate and a long lifespan. China's working population may soon have to work longer hours.
In late July 2024, China's ruling Communist Party passed a resolution to gradually raise the country's statutory retirement age over the next five years. The final retirement age has not yet been determined, but earlier official reports suggest it could be around 65. The move would bring China more in line with other large economies, including the United States. China currently has the lowest retirement age in the world, at 60 for men, 55 for white-collar women and 50 for blue-collar women.
Chinese leaders have been considering reforming China's retirement program for several years. But the apparent urgency now reflects growing concerns about a shrinking and aging population, which will affect China's dwindling pension reserves.
The Chinese Academy of Social Sciences predicted several years ago that China's reserves for pensions would run out by 2035.
There is no doubt that raising the retirement age will allow pension funds to last a few more years.
But it is not a long-term solution, and it does nothing to solve the serious underlying demographic problems facing China.
The demographic problem China now faces is the most serious one the country has faced in centuries.
With a fertility rate of 1.1 children per woman, far below the 2.1 children per woman needed to sustain the local population, and more deaths than births each year, China is facing a future of population decline and a large increase in the number of elderly people. To complicate matters, China has long resisted the idea of replenishing its population through immigration, and only 0.1% of the population is foreign-born - the lowest rate of any major country in the world.
In 1950, a few months after the founding of the People's Republic of China, the national population was 539 million. For nearly 70 years, the population has increased every year, reaching 1.43 billion in 2021. At the same time, the population peaked. In the following years, China has had more deaths than births and its population has been declining. Furthermore, UN population projections suggest that if current trends continue, China’s population will fall below 1 billion in 2070, below 800 million in 2086, and to 633 million by 2100. This means that in about 75 years, China’s current population has been reduced by more than half. Such a dramatic population decline would wreak havoc on China’s workforce, leading to numerous economic problems.
But it’s not just the overall population that’s falling. Perhaps more concerning is the demographic shift.
According to the UN, less than 20% of China’s population will be in the current retirement age group of 60 and over in 2023. But by 2100, that number is expected to grow to a staggering more than 52%.
UN data also show that currently about 12% of China’s population are young workers aged 20 to 29, while 46% are older workers aged 30 to 59. But by 2100, the share of young workers is projected to drop sharply, to just over 7%, and the share of workers aged 30 to 59 to about 29% of the population.
Similarly, the number of children and young people aged 19 and under in China is expected to drop from 21% of the population in 2023 to 11% in 2100.
Simply put, the projections for China’s population do not bode well for the country’s future. There will be fewer workers to support a growing population of caregivers, most of whom are elderly.
But China’s plans to raise the retirement age will do little to mitigate the problems associated with these trends. Raising the retirement age will do nothing to slow population decline, and will have only a marginal effect on the ratio of working to unemployed adults.
There is, however, a way to mitigate these trends: immigration.
Many of the world’s leading countries with very low fertility rates rely on international migrants to provide a young workforce, and these young immigrants also have more babies than locals. For example, China, by comparison, has only 0.1% of its population foreign-born, while the United States and Germany have foreign-born percentages of nearly 14% and 18%, respectively. Even two East Asian countries, Japan and South Korea, have higher foreign-born percentages than China, at 2% and 3.7%, respectively.
The Chinese government has made several attempts to implement policies to increase the birth rate, but none of them have worked. In fact, demographers tend to agree that policies like "encouraging childbirth" will not work.
But it will not be easy to introduce and implement an aggressive immigration policy in China. The country has little experience with immigration policy, and many leaders in the Communist Party seem deeply committed to the idea of racial purity.
The broader Chinese population is likely to resist immigration. China's young workers will be the group most affected by increased immigration. In the early stages of any policy to encourage large-scale immigration, some Chinese may lose their jobs and need to find jobs elsewhere. This is especially true for young workers.
But in general, immigrants will take jobs that locals don't like - sometimes referred to as "3D jobs," in other words, jobs that are dirty, dangerous, and degrading. This is the case in most European countries and the United States.
The alternative will be more painful for China in the long run. Without an aggressive immigration policy, by the beginning of the next century, China's population will be half of what it is now, and it will be one of the oldest, if not the oldest, populations in the world.
Beijing is already facing pressure from these trends, so pension reforms are needed. But without the influx of young immigrant labor, China's problems will be even more serious.
China's aging population shows five trend characteristics:
(1).Large scale, with one in every four elderly people in the world being Chinese.
(2).Fast speed, with the next 30 years or so in a period of rapid deepening of aging.
(3)Obvious aging trend, with the proportion of elderly people expected to exceed 10% around 2050.
(4) Getting old before getting rich.
(5) Inverted urban and rural areas, with high in the east and low in the west.
Aging caused by longevity is not terrible, as it reflects social progress and improved medical standards, but the problem of significantly accelerated aging caused by the intensification of the low birth rate should not be underestimated.
From an economic perspective, this is the disappearance of the demographic dividend, followed by an increase in the social dependency ratio, an increase in the burden of elderly care, an increase in social security pressure, an increase in government debt, and a decline in the vitality of social innovation and entrepreneurship.
How to deal with population aging?
OECD countries entered the aging stage relatively early. The introduction of immigrants brought young labor, but the integration of immigrants needs to be taken seriously. Boosting fertility mainly depends on the strength of fertility support, improving the multi-pillar pension system, delaying retirement and other measures to reduce the intergenerational burden of pension payments. The United States is the largest immigration country. A large number of immigrants support the continued positive population growth and the stable proportion of the labor force, but the problem of immigrant integration still exists. On the one hand, Germany has improved its fertility subsidy policy and promoted the work-family balance of women raising children, which has boosted the fertility rate. On the other hand, it has explored a shared pension mechanism to reduce the intergenerational burden.
Japan's aging is characterized by "late start, fast speed and deep degree". As the reform of fertility policy and pension system missed the time window, the population structure has not improved and the social pension burden is heavy.
So what policies has Japan adopted?
(1) It is the general trend to fully liberalize and encourage fertility. First, fully liberalize fertility. Second, vigorously issue fertility subsidies and implement differentiated personal tax deductions and housing purchase subsidies. Third, increase the supply of childcare services and provide subsidies for grandparents. Fourth, improve the protection of women's employment rights and interests, and accelerate the establishment of a reasonable and effective mechanism for sharing the cost of childbirth between the state, enterprises and families. Fifth, establish a social support system for gender equality, such as equal maternity leave for both men and women. Sixth, strengthen the protection of equal rights for non-marital births. Seventh, support assisted reproduction and provide subsidies for assisted reproduction.
(2) Actively respond to population aging and build an aging-friendly society. First, accelerate the promotion of national social security coordination and give full play to the important role of the second and third pillars in the pension security system. Second, build a lifelong learning system for the elderly, promote a gradual delay in retirement policies, and encourage enterprises to retain and employ older workers. Third, encourage relatives and friends to take care of and provide subsidies, and accelerate the training of professional talents in the pension industry. Fourth, increase investment in education, improve the quality of the workforce, and shift from demographic dividends to human capital dividends. Fifth, vigorously develop the "Internet + elderly care" smart elderly care service system and promote aging-friendly transformation.
It is believed that after a series of long-term and short-term measures, China's population structure is expected to gradually improve, thereby achieving long-term healthy and balanced population development.
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