Services
 
 
ORF CHINA WEEKLY
You are here:orfonline.org Weekly Report ORF CHINA WEEKLY
 
Vol. II Issue. 42
Ageing population becoming a serious problem in China
Sadhavi Chauhan
15 October 2012

ANALYSIS

Unlike developed countries where economic development preceded population aging, China faces a massive aging population while its economy is still growing. The threat posed by this demographic pattern is so serious that scholars fear, if left unchecked, it might impede further development in China. For a country whose young work force has constituted the backbone of its economic growth, a rapidly aging population presents both short-term and long-term challenges.

According to experts, by 2040, 400 million Chinese will be more than 60 years old. This figure is larger than the population of France, Germany, Italy, Japan and the United Kingdom put together. Accompanying this is the increasing life expectancy in China, which has recorded a growth from 40.8 to 71.5 between 1955 and 2005. In this background, it is a matter of time when China, which currently has over one-fifth of the world's elderly population, will record the highest elderly population.

The roots of this aging population, which serves as one of the biggest contemporary threats to China, can be traced to the One Child Policy (OCP) introduced by Mao Zedong. The impact of this policy can be established from the fact that China's fertility rate dropped from 7.5 children per family in 1963 to 1.7 in 2003.

One offshoot of this policy that has attracted immense media attention is the '4-2-1 phenomenon'. According to this phenomenon, the One Child Policy has resulted in the establishment of a setup where one child is responsible for two parents and four grandparents.

This responsibility of the parents on the younger generation in turn follows China's tradition of children supporting aging parents based on the social ideals of Confucius. Broadly followed in China, Confucius is known for propagation of the principle of mutual respect between children and parents. Professor Wang Sibin from the Peking University added to this, saying that in China there is a belief that every child will have a younger generation to support them. This has resulted in an obligation on the child to take care of the elderly.

The economic consequence of this phenomenon also has been enormous. With the country's older population swelling, there is a decline in the workforce available to drive economic growth. Meeting the health and long term care needs of the growing elderly population will result in soaring health costs while simultaneously the size of the working age population to pay the bill will shrink. Notably, the elderly-support ratio-the working age adult is projected to decline from 9 persons to 2.5 persons by 2050. Therefore, a compromise in the quality of life for senior citizens in the coming years will definitely be witnessed.

Already the challenge of paying for healthcare in China has gone up with an increase in overall costs and private expenditure, which has accompanied China's shift to a market oriented economy. It's sad as to how the Chinese health care system once known for its accessibility to all, today relies heavily on private funding and is characterized by excessive usage fee. This further adds to the inadequacy of its health care provisions, particularly in the face of the demographic trend that the country is witnessing currently. Evidently, the rapidly increasing elderly population of China has created a pressing need to work out a political solution.

Toshiko Kaneda, policy analyst at the Population Reference Bureau, has identified an even more interesting angle to China's aging population. She noted that the sex ratio at birth for young cohorts born after China's one-child policy is in favour of boys. This does not come as good news for China where women, particularly daughter in laws, are seen as elder caregivers. The simultaneous occurrence of a swelling aged population with a declining caretaking population further complicates the nature of the challenge before China.

The Chinese government has acknowledged this emerging threat and is starting to develop a comprehensive response. As a first step, the Chinese government has implemented various chronic disease prevention programs at the national level. Secondly, although public funding for the long term care of the elderly in China remains limited, the government has started allocating more funds in this sector. Thirdly, though small in number and of varying standards, a number of private and community elder homes have emerged in China, to help reduce the burden on the country's declining work force.

Most recently, Chinese Premier Wen Jiabao called for increased government spending on the social pension insurance system to address the country's aging problem. The urgency to address this source of social discontent was established by his statement that, 'the government must guarantee financial support in the system even if it has to cut investment on other projects.'

Despite having the world's largest pension insurance system, China is the world's most populous country and a developing nation. Addressing China's aging population and elderly care challenges will be crucial to China's continued social and economic development and stability.

(The writer is an Associate Fellow at Observer Research Foundation)

FOREIGN AFFAIRS

Chinese, Maldivian leaders exchange congratulatory message

To mark the 40th anniversary of the establishment of diplomatic relations between the two countries, Chinese and Maldivian leaders exchanged congratulatory message. Chinese President Hu Jintao congratulated his counterpart Mohamed Waheed Hassan Malik with the message that China-Maldives relation has become the model of friendship between a big country and a small country. Waheed in reply said that Maldives highly values the profound traditional relation and is grateful for assistance to its development.

Source (s): Xinhua, October 14, 2012

China pledges support to Russia's leadership bid

Chinese vice-foreign minister Cui Tiankai said that it will fully support Russia in its efforts to host the leaders' summit of the G20 economies next year. This was expressed at a press conference after a meeting with the Russian Sherpa of the G20 Ksenia Yudaeva.

Cui added that both the countries have maintained fruitful coordination and cooperation in tackling the international financial crisis over the past years. Also, both the countries agreed to step up cooperation and advance common interests with the framework of the G20.

Source (s): China Daily, October 14, 2012

Lower level delegation to Japan 'appropriate': FM

Chinese Foreign Minister Yang Jiechi said the lower-level delegations that China sent to Tokyo for the annual meetings of the International Monetary Fund and World Bank were 'completely appropriate', given the current tense China-Japan relations over the Diaoyu Islands territorial row.

This step was taken mainly because of the IMF Chief Christine Lagarde comment on 11the October 2012 stating that China will lose out by not sending its top two finance officials to the global economic talks this week. She also called on Beijing and Tokyo to settle the row quickly, as countries in this region are very important for the global economy.

Source (s): China Daily, October 12, 2012

China pledges closer ties with Switzerland

Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body, described Switzerland as China's important partner in Europe and stressed the importance China has placed on developing ties with the Swiss side. Jia met with Bruno Zuppiger, president of the Switzerland-China group of the Swiss National Council.

Jai stated that China would like to work with Switzerland to understand and take care of each other's interests and concerns in a bid to seek new progress of bilateral cooperation in all fields. On the other hand, Bruno Zuppiger mentioned that there is huge potential for the countries to work together. He said the group he heads is committed to providing all-round objective information on China for the Swiss and promoting economic - cultural exchanges and also positive efforts for growth of bilateral relations.

Source (s): Xinhua, October 11, 2012

POLITICS AND SOCIETY

Legislator urges strengthened role for constitution

Senior Chinese legislator Lu Yongxiang has called for constant efforts to govern the nation in accordance with the constitution.

Abiding by the constitution and governing the nation in compliance with the constitution are vital to the early materialization of the rejuvenation of the Chinese nation, said Lu, Vice Chairman of the Standing Committee of the National People's Congress (NPC), China's top legislative body.

China enacted its first constitution in 1954, paving the basis for the country's endeavor to build a country ruled by law. In 1982, the fifth session of the fifth NPC adopted the present constitution, which was amended four times in 1988, 1993, 1999 and 2004, respectively.

The forum was held by the China Law Society to mark the 30th anniversary of the promulgation of the present constitution.

Source (s): Xinhua, August 13, 2012

Official suspended from post over property scandal

Authorities in south China's city of Guangzhou decided to suspend an official from his post after initial investigations showed his family owned 21 houses, well above what his legitimate earnings would allow.

The number of homes associated with Cai Bin, a senior urban management official of Panyu District, Guangzhou, capital of Guangdong Province, was almost the same as that claimed by muckrakers who brought the scandal to light in cyberspace recently, according to a statement issued by the Communist Party of China (CPC) discipline inspection committee of Panyu.

Cai is the latest in a series of Chinese officials who have been targeted by the country's netizens and later investigated by disciplinary watchdogs over the past three years.

Of the 21 houses, 19 are registered under the name of his wife, Shi Liying, and his son. Cai and Shi jointly own one and the other is under the name of Cai.A real estate agency estimated that the total market value of the properties could be 40 million yuan (6.3 million US dollars). Cai's monthly pay is around 10,000 yuan. The salary of his wife, a retired government employee, is lower.

Ahead of the 18th National Congress of the CPC, scheduled for Nov. 8, the anti-corruption bodies of the CPC have punished more than 660,000 officials guilty of disciplinary violations in the past five years.

Source (s): Xinhua, August 11, 2012

Award-winning auditor becomes CPC delegate

Zhou Mingjue, 56, is the only delegate selected from the nation's 250,000 Certified Public Accountants for the National Congress of 18th Communist Party of China on November 8.

Zhou works as the Party Chief in the Changsha branch of the accounting firm Shinewing, calling himself "an economic policemen without uniform".

Zhou promises to strictly abide by auditing principles and uphold high ethical standards even if it means economic loss for the firm.

"One client listed on the market wanted us to lie about a government allocation as an income, but we rejected and stopped working as its auditor."

During his 22-year career in auditing, he has participated in national projects, such as the Beijing-Jiujiang-Kowloon Railway and the South-to-North Water Diversion Project, winning numerous awards for his dedication. said.

Source (s): China Daily, August 8, 2012

ECONOMY

China boosting global confidence

Yi Gang, Vice-Governor of the People's Bank of China, announced on Friday in an interview with Xinhua, while attending the IMF and World Bank annual meeting in Tokyo, that China will continue to move forward with the IMF reform package strengthen cooperation among BRICS nations.

According to Yi, China has been making efforts to advance the reform package, and when the other countries complete their approval procedures the package can be implemented thoroughly.

Furthermore, Yi also mentioned discussions with other members of BRICS regarding the possibility of strengthening cooperation by instituting a mechanism that can provide liquidity in case of an emergency or crisis.

With the global economy on the verge of recession, the major challenges created by the European debt crisis, mounting US deficit and stagnating growth in the developing countries, would be to maintain growth and create jobs, and to coordinate the macro-economic policies of major economies.

Yi believes that there are a lot of high hopes pinned on China's economy given the fact that it has been critical in overcoming difficulties and pursuing recovery. China's economic stability, aided by the measures taken this year, is good news for the world, and help boost global investor confidence.

Source (s): China Daily, October 15, 2012-10-17

China's policy measures are on track

Indications that the Chinese Government's economic measures are working were reflected in the fact that China's exports grew at approximately twice the expected rate, and imports returned to a path of expansion. Also suggesting that additional policy actions may not be needed for the time being.

Based on customs data, exports in September grew 9.9 percent from a year earlier, nearly twice what was expected by investors and up sharply from the 2.7 percent annual rise recorded in August.

Imports also rose 2.4 percent year-on-year in September, which is in line with the Reuters poll that forecasted a recovery after the 2.6 percent annual decline in August.

Trade surplus was $27.7 billion in September, which is significantly greater than the forecasted 20.6 billion and August's $26.7 billion.

Xiao Bo, economist at Huarong Securities in Beijing told Reuters, "With the recovery in the export growth, we think Beijing will not cut RRR or interest rates further in the coming months as policymakers tend to keep policy stable when China heads towards a once-a-decade leadership change."

Source (s): Reuters, October 13, 2012

SCIENCE AND TECHNOLOGY

Another Satellite to be launched for Beidoun

Beijing News reported that China will be launching a new satellite for its homegrown navigation system, Beidou, at the end of October. The satellite will be joining 15 satellites already in orbit. With the addition of the satellite, the network will be completed and services to customers in the Asia-Pacific region will soon commence.

China sent five satellites this year to speed up the completion of the Beidou navigation and positioning system. The first satellite for the system was launched in 2000. Presently, the Beidou will be able to cover China and the surrounding regions. According to China National Space Administration, the system will be able to cater to global customers by the year 2020.

Source (s): China Daily, October 15, 2012-10-17

China launches civilian technology satellites

China successfully launched the Practice-9 A and Practice-9 B satellites into space at 11:25 a.m. 14th October 2012, the Taiyuan Satellite Launch Center said. The satellites will be used to experiment with domestically developed components, satellite formations and inter-satellite measurement.

Source (s): Xinhua, October 14, 2012



Contributors:

•   Sadhavi Chauhan
•   Arvind K. John
•   Shaantanu Shankar