Sustaining prosperity while growing old

8 January 2019

By Babatunde Ahonsi, Resident Representative (China), United Nations Population Fund

Humanity is becoming older due mainly to fewer children being born, reinforced by people living much longer. China is now home to the largest number of elderly people and their size is increasing faster than in most other ageing countries with the fastest increase happening among the oldest old (ages 80 and over). Compared to France’s 115 years, it will take China 25 years to double its population aged 60 years and over from one in 10 persons in 2000 to one in five persons in 2025 with about 240 million people in China now age 60 or older. These trends have heightened worries about China becoming old before becoming rich especially with the onset in 2011 of the shrinking of its labor force.

Are these fears exaggerated? Why would a country that in 40 years lifted over 700 million of its people out of poverty and emerged from being among the poorest countries in the world to becoming the second largest economy be unable to mitigate the adverse consequences of ageing?  Given that China’s elderly population is increasing by 10 million annually, shouldn’t the focus be on how to adjust the economy, health systems, and social institutions fast enough to provide economic security, safety, and good quality of life for the growing number of senior citizens? Moreover, are there new opportunities that come with ageing that could further drive economic development?

We know that it is the productivity of the population rather than its size that largely determines the economic development of a country. China is already accelerating efforts to massively increase the skill attainment of the population, improve the quality and coverage of affordable health care and pension systems, as well as shift the economy towards high end, innovation-driven manufacturing and services. It may, thus be well placed to turn ageing into a key driver of sustainable development.   

Nonetheless, a number of short term and medium-to-long term actions by government, the private sector and civil society organizations, especially if well-coordinated, would make it easier for the above-painted scenario to be realized in the coming decades. 

First, actions should be taken to reap the potentials of new generations of older people. It is the case that the typical 70-year old in China today is much healthier and skilled than the 70-year old 20 years ago. So, a gradual increase in the retirement age and equal retirement age for men and women as well as full exploitation of the opportunities from growing the already large ‘silver economy’ that caters to the healthcare, learning, mobility, leisure, and financial service needs of older persons could yield huge longevity dividends. In particular, the expected yearly increase in life expectancy and women’s participation in the labor force as the country further modernizes would create room to expand the tax revenue base required for an effective response to ageing.

Second, measures should be taken to support the younger generations to fulfill their fertility desires. The fact that young adults in China marry late and choose to have one or no child is the key driver of ageing in China, and is likely to be the case into the foreseeable future because of the high economic and social costs of bearing and raising children especially for women. Women’s almost exclusive responsibility for unpaid care work, coupled with inadequate maternity and paternity leave, lack of flexible working arrangements, and work-life imbalance greatly discourage child rearing. Key social measures that might be considered, based on lessons from some Scandinavian countries, include weighted tax reductions, childcare subsidies, affordable quality care for children and the elderly, generous parental leave schemes, institution of flexible work arrangements, and policies to empower women and promote more equal share of household work between men and women. These measures have tended to produce better results when targeted well to reduce inequalities between rural and urban areas, regions, and sectors.  It would also include provision of access to quality sexual and reproductive health services to couples suffering from infertility.  

Finally, greater investment should be made in the younger generations today who will be the older population in the future, particularly in terms of health and education. It is the investment in younger generations that determines active and healthy ageing through the life course, and it is young people that shape future rates of childbearing.

United Nations Population Fund, UNFPA, as the lead UN agency for population and reproductive health, has consistently supported China’s improving policy responses to ageing dating back to the early 1980s when it funded the country’s first major research on ageing. It has more recently stepped up support in response to the intensifying speed and scale of ageing in China and more than 30 other countries across the world through a Global Programme on Ageing and Low Fertility. As UNFPA celebrates four decades of cooperation with China in 2019, we will continue to work with governments and other institutions to foster more forward-looking, integrated and positive responses to ageing. 

Given China’s population and development record to date, we are confident that despite its changing age structure, China’s population is likely to remain a strong asset for its sustainable development.