China Facing the Challenge of Aging Population

China Facing the Challenge of Aging Population

"A large population and underdevelopment are the two facts China has to face. Since China has 1.3 billion people, any small individual problem multiplied by 1.3 billion becomes a big problem, and any considerable amount of financial and material resources divided by 1.3 billion becomes a very low per capita level. This is a reality that the Chinese leaders have to keep firmly in mind at all times." - Chinese Premier Wen Jiabao, in a speech delivered at Harvard University on December 10, 2003
Family planning policies were introduced in China in the first half of the 1970s with a view to curb population growth, and as part of the scheme the one-child policy was implemented in the early 1980s (box). This, together with a decline in infant mortality rate and a rise in life expectancy, has led to China making a demographic transition from the developing-country model of high birth rate, high death rate and high population growth to the developed-country model of low birth rate, low death rate and low population growth in a relatively short time (figure 1). During this transition period, the child population began falling before the graying of society, thereby leading to a rise in the working-age proportion of the population and a decline in the percentage of dependents, bringing about a "demographic dividend " that was advantageous to economic growth. However, more recently, China is beginning to hear the footsteps of an aging society, and the time is drawing near when the working-age population ratio starts to fall and the dependency ratio begins to increase. Population aging is a phenomenon generally seen in developed countries, but China will have to face the challenge of entering this stage before becoming affluent.

Triggered by the introduction of family planning policies, between the latter half of the 1960s and the first half of the 2000s, China's crude birth rate and population growth rate have decreased to...