Population Aging: A Great Pitfall in China’s Economic Society
In the 1960s, the Great Famine raged the new China when tens of millions of literate youths were forced to migrate into villages for farm work. Yet the urban areas didn’t actually usher in the so-called “population aging” while rural areas didn’t benefit from the so-called population bonus. In the late 1970s, urban areas ushered in the overwhelming influx of the literate youths, followed by the greatest social problem for offering jobs for them, just like the conflict of the forced dismantling and resettlement in today’s urban areas in China. At that time, the Chinese population was far younger than it is today when young people were consuming but had no jobs, thus they found it hard to earn money to support themselves, becoming enormous burden for the society. Today, things turn upside down, the elder people become tremendous burden as provisions for the aged become the greatest pressure imposed on the Chinese economy in the future. How come that the literate youths of Cultural Revolution are beset with such an embarrassing situation that they are always deemed as the great trouble of the society either in youth or in senior years? As a matter of fact, China’s rapid economic growth in the past three decades should be attributable to their efforts and contributions…
Every “spring rush” in China will witness almost all Chinese young adults join in the largest globally seasonal migration and their destinations are nests of the elderly, most of whom are scattered in vast rural areas in China, where the elderly and their grandchildren stay in the old houses, hanging on together. During the spring festival, the most disturbing problem for urban residents is whether these country folks nicknamed as migrant workers will come back to cities as expected because it is closely related to the normal business of shops and factories, daily care for their elderly and infants, and other services and business. After long holidays, urban areas are immediately brought back to the previous vitality and luster while on lands of rural areas there are only older farmers who will linger on and die and lands are left uncultivated. When rural children grow up, they will eagerly leave rural houses and head for cities. So the urban areas are almost always younger while the aging in rural areas increase rapidly. How come that the virtual aging in urban areas attracts so much attention while the true aging in rural areas is sternly ignored?
Which is better: more population or less population; more young people or fewer
young people; more urban residents or rural residents? These questions should be offered different answer at different economic phases and in different socio-economic situations, and most importantly, different government departments tend to air different opinions and standpoints. We can still remember the previous occasions when obsolete notions like raising children to support the elder life were severely criticized and mercilessly disparaged. However, people presently like to discourse eloquently on the idea of family support for the elderly and scrupulously abide by the so-called filial ethics. So we have the endless grumbles, such as too great pressure for pension payment and lack of feasible approaches to stimulate domestic demands. On the one hand, it is necessary to raise the resident incomes to safeguard the people's livelihood; on the other hand, it is necessary to maintain the international competition advantages by keeping enough low-paid laborers. So the government spares no effort to expand the urban economy but at the same time refuses to financially provide migrant workers with equal access to education, medical care and social security. In essence, the key issue here is that whether the population is a tool or a goal of the socio-economic development.
People-oriented ideology is the starting point and the basis of “Scientific Outlook on Development”. If we just take population as tools, we may consciously or unconsciously fall into a series of huge pitfalls related to population and economy. If so, it may lead to instability in logic and great errors in policy. So we can not merely focus on the urban population aging but on the contrary, intentionally ignore the rural population aging; we cannot just think of the pressure caused by the population aging, and subsequently shrink the coverage of pension and level instead of striving to expand it. It is unreasonable to enhance and ensure the pension and medical care for a small group of people with the sufficient channels and abundant resources while get rid of lots of elder people with the expectation that family support or social sponsorships could help. In general, it is unwise that we put more economic resources to drive forward the economy while regard the social security system as economic burden, coupled with the embezzlement of pensions and so on, which fully reveals a fundamental debasement in essential values.
The population problem necessitates the concerted efforts made by families, governments, enterprises and society for a solution. The family planning is a policy for government to manage the population quantity, quality and structure, etc. In the early 1970s, China began its efforts for birth control, and in the 1980s, family planning was upgraded as one of the national policies, particularly one-child policy, which remains valid even today. It follows that China has achieved the goal of birth-right
nationalization. Therefore, families, firms and society are giving the full support to the implementation of family planning policy administered by the government authorities to intervene in the private birth right.
At present, one-child policy produces the adverse effect: Firstly, marriage age and reproductive age are, to some extent, delayed due to rapid socio-economic change, so child-bearing desire drops, followed by the drastic decrease of birth rate; secondly, more-than-one-child is tacitly permitted due to rule-bending attitudes by some government departments and continually delayed intervention of the family planning authorities, so there appear a lot of unregistered newborns who are legalized through the payment of fines. In other words, these children can contribute to head tax for more-than-one-child families. In view of special properties of evaluation measurement of family planning, and uncertainty of fines standard, mere payment of fines does not mean couples having more than one child can go through birth control, so severe cases of mandatory abortion and other violations against human rights occur from time to time. With the shock wave of the population aging, one-child policy is likely to be loose nationwide, so more and more families can completely redeem the nationalized reproductive right by paying fines which are in nature head tax for more than one child. Perhaps it will be universal choice from the realistic perspective. However, it will not be all easy in the future, but even intensify social conflicts and bring tough social and political unrests.
Let’s look back from the economic perspective. China’s urban areas gain expansion at annual speed of 1000 square kilometers, and attract 10 million persons into employment. The urban-rural dual economy has destroyed one complete scenario of China’s aged population—Urbanization and Industrialization have become the most powerful players to regulate and balance the trend of China’s aged population. One-child policy is continually loosening and changing in terms of the specific implementation. So it follows that two imminent pressures are thus caused by the aged population with the direct economic impact: urban financial pressure and rural elderly support pressure. As governments depend on lands to gain their revenues, the land benefits are not sufficiently reserved for the urban and rural social security insurance and transfer of profits of state-owned enterprises is quite limited, coupled with such factors as operation efficiency of social security funds and inflation, etc., China’s pension fund gap is continuously widening. If no more funds are injected from special sources, Government Pension System will get into
greater trouble and long-term financial crisis will deteriorate and impose greater political pressure upon society. The rural social security insurance is, as a matter of fact, directly burdened by families. Moreover, the rural medical care is also confronted with the shortage of funds, thus urgently waiting for the investment to improve relevant facilities. The most realistic approach is to correspondingly adjust the land ownerships so that rural communities and farmers can be properly safeguarded for their long-term benefits from the land.
The reality of China’s population is that it is difficult to control the birth number down to one for some families, and even more difficult to encourage more families to have more children. So the actual effect of nationalized reproductive rights is continuously fading and reproductive rights will be eventually returned to couples. Consequently, there will be a substantial decline in fines, but not a sharp rise of its population and not a structural improvement.. In short, population aging is inevitable.
The population aging has a direct impact upon the government financial system. This is a growing, or more bluntly, worsening issue that could not be abandoned by the government. It is necessary for authorities to transform themselves into a public fiscal system, expanding sources of public finance revenue by means of universal asset management and more debts as well as altering from promotion of economic growth into maintenance of the sound, steady and sustainable development of economic society.
The Japanese society is both wealthy and old and actually the economy of the elderly is generally referred to as silver-hair economy. Now there are tens of thousands of Chinese cheap laborers or trainees to take care of Japanese elders. When China was experiencing the pay rise due to lack of migrant workers, Japanese enterprises were even more concerned at full stretch, worrying about the loss of the Chinese cheap laborers or trainees to , thus leading to the breakup of their silver hair economy and further shaking up the stability of their economic society. In response to the impact of the population aging, the wealthy economic society seems to be so fragile, so China should play it safe and be practically prudent to circumvent three major pitfalls: more births, family support for elders and priority to urban areas.
Originally published on http://cn.reuters.com | August 21, 2012
