China demographics thread.

[Deleted member 15887]

Anyhow, I wouldn't worry about demographic issues too much.

The vast majority of old Chinese workers who will be retiring in the coming years are predominantly rural farmers, manning China's heavily, purposefully under-mechanized agricultural sector. Since agriculture accounts but a small share of the economy, its economic impacts won't do too much damage. As old farmers retire, machinery and automation will likely have an increased role in the agricultural sector, as they already have in the manufacturing sector.

The wave of retiring workers will place an increased strain of old-age pension/social security funds for sure, so that is the biggest worry probably when discussing China's demographic issues. But then again, remember the abnormally low retirement ages for old Chinese workers (in many cases 45-50 for women, 55-60 for men). Raising the retirement age by 15-20 years to be more in-line with average retirement ages of the West can help stave off pension/dependency worries, at least until the 2040's. By then, a solution may have been figured out (or the population pyramid returns to a more healthier balance).

Furthermore, if demographic issues really starts to be a problem, like the pollution problem or the terrorism problem, you can bet the party will come up with a drastic action to solve it as they always do, being fans of social engineering. This might include strong pro-natalism measures, among others.

My take would be: if China really wants to avoid any problems associated with population aging (which IMO are quite overblown), they can easily solve this by (in order of likelihood/effectiveness):

1. Abolish all existing child-restriction policies (get-rid of 2/3-child policies)
2. Raise the retirement age to 65-70 during this decade
3. Use the sovereign wealth fund ($3 trillion USD saved up) as a slush fund for emergencies/old-age pension funds
4. Institute natalist policies: these might include priority privileges, tax cuts, free childcare, job benefits, social benefits for families who have at least 2-3 children, with the scope of benefits increasing the more children they have. Accompanied with a heavy dose of pro-natalist messaging and propaganda to reinforce social support for having more children.

By raising the retirement age to 65-70, it basically staves off mass retirements and workforce exits until the 2040s (basically 20 years later). If abolishment of child-restriction policies occur this year or the next, and if natalist policies are implemented in the coming years, then they will come just in time for the mass retirements of the 2040s-2050s, as simultaneously young people will just be entering the workforce to replace them and prevent numerical reductions in workforce.

Having said that, natalist policies might only see a sizeable effect several years after mass retirements begin (most likely by the 2050s), while waves of retirement could begin in the late 2030s/early 2040s. So in between that time, the sovereign wealth fund with $3 trillion USD saved up can be used as a possible slush fund for pensions/emergencies until the workforce catches up and can sustain the elderly.

 

[kentchang]

Anyhow, I wouldn't worry about demographic issues too much.

The vast majority of old Chinese workers who will be retiring in the coming years are predominantly rural farmers, manning China's heavily, purposefully under-mechanized agricultural sector. Since agriculture accounts but a small share of the economy, its economic impacts won't do too much damage. As old farmers retire, machinery and automation will likely have an increased role in the agricultural sector, as they already have in the manufacturing sector.

The wave of retiring workers will place an increased strain of old-age pension/social security funds for sure, so that is the biggest worry probably when discussing China's demographic issues. But then again, remember the abnormally low retirement ages for old Chinese workers (in many cases 45-50 for women, 55-60 for men). Raising the retirement age by 15-20 years to be more in-line with average retirement ages of the West can help stave off pension/dependency worries, at least until the 2040's. By then, a solution may have been figured out (or the population pyramid returns to a more healthier balance).

Furthermore, if demographic issues really starts to be a problem, like the pollution problem or the terrorism problem, you can bet the party will come up with a drastic action to solve it as they always do, being fans of social engineering. This might include strong pro-natalism measures, among others.

My take would be: if China really wants to avoid any problems associated with population aging (which IMO are quite overblown), they can easily solve this by (in order of likelihood/effectiveness):

1. Abolish all existing child-restriction policies (get-rid of 2/3-child policies)
2. Raise the retirement age to 65-70 during this decade
3. Use the sovereign wealth fund ($3 trillion USD saved up) as a slush fund for emergencies/old-age pension funds
4. Institute natalist policies: these might include priority privileges, tax cuts, free childcare, job benefits, social benefits for families who have at least 2-3 children, with the scope of benefits increasing the more children they have. Accompanied with a heavy dose of pro-natalist messaging and propaganda to reinforce social support for having more children.

By raising the retirement age to 65-70, it basically staves off mass retirements and workforce exits until the 2040s (basically 20 years later). If abolishment of child-restriction policies occur this year or the next, and if natalist policies are implemented in the coming years, then they will come just in time for the mass retirements of the 2040s-2050s, as simultaneously young people will just be entering the workforce to replace them and prevent numerical reductions in workforce.

Having said that, natalist policies might only see a sizeable effect several years after mass retirements begin (most likely by the 2050s), while waves of retirement could begin in the late 2030s/early 2040s. So in between that time, the sovereign wealth fund with $3 trillion USD saved up can be used as a possible slush fund for pensions/emergencies until the workforce catches up and can sustain the elderly.

Excellent analysis. Adding a few comments in addition to changing the one-two-n-child policies.

0. The low retirement age was set when China had surplus labor and when jobs were mostly physical.
1. Raising retirement age can only be implemented slowly like add one year every two years.
2. It has been calculated that if all the SOE's are privatized, China can fully fund its pension obligations.
3. Liberalize foreign migrant workers like Taiwan and Japan.
4. Liberalize immigration from bordering countries like North Korea and Southeast Asia.
5. Reduce the size of government employees. Cut the military manpower in half.
6. Faster rate of automation to free up resources.
7. With a 55% urbanization, there is still a lot of untapped productivity gains.

I put the graying issue in the same category as the "30+ million more boys than girls" social crisis reported years ago. Yes, there are concerns. No, the real stories are more mundane.

 

[OppositeDay]

China has to wait a bit longer before raising retirement age. The post-60's generation are now retiring and they are on the whole much less educated than the post-70's. And they tend to worship the West because their formative years were when China first opened up to the West and realized who much we were behind. Chinese promotion, I think, is in general less seniority-based than Japanese, but older folks do tend to have more power. We want the post-60s replaced by post-70s in leadership positions sooner rather than later.

And this points to both a problem and a strength for China. Ideally China wants the older generation to work longer, but they are much less educated than younger generation, and likely less productive. That's the problem. The strength is that China's better-educated workforce will continue to grow even after the total workforce beginning to drop.

Also educated Chinese tend not to really retire after the retirement age. Chinese government offices, public-funded institutions (schools, hospitals) and even state-owned companies all want to retain their experienced staff. Professionals are often re-hired as contractors by their original employer after their official retirement, which actually is an amazing solution: you retain technical talents but let younger folks into leadership positions. I have a uncle who has been working for decades as a lab technician in one of China's best universities. He's in his 70s and still working despite having been collecting pension for 10+ years.

 

[foofy]

there is no penalty for unregistered baby. It just more hassle to register to the authority when they is a need.

 

[Tam]

removed.

 

[solarz]

China's huge population is what leads to things like 996 and ridiculous bride prices.

Not sure if you guys really realize just how fricking competitive the Chinese society is.

No parent wants that kind of life for their children, and that's a big part of the reason for so many Chinese professionals to emigrate to Western countries. That's brain drain right there.

China does not have a demographic problem though. Problem implies it's something yet to be solved, when it's clear that the Chinese government is well aware of the demographic trend and has a plan to manage the shift.

One salient example: home prices. Chinese home prices were largely driven by the most affluent generation, the post-80s and post-90s, reaching marriage age. The government introduced a series of measures to curb home price explosion, and young people these days face a lot less pressure than their counterparts did 10 years ago.

As the boomer generation get older, there will be more need for both elder care and child care. The government will need to step up to provide the necessary support for working parents. In the grand scheme of things, none of those are big problems.

 

[Jiang ZeminFanboy]

@solarz:

China's huge population is what leads to things like 996 and ridiculous bride prices.

*China's gender imbalance problem is what leads to things like ridiculous bride prices.

I corrected.

Of those born last year, 52.7% were boys and 47.3% girls.

A bit better than before but still people abort girls. They have nails in their brains because they will have to pay for their son's apartment and car to get him married. Wish it will end. How people can be so stupid as to abort a girl baby for a son?

 

[Appix]

They still fine the handfull of Chinese couples that have more than two children. What a disastrous political inertia. That couple should have been praised instead of fined. 1970s natalist politics that have never caught up with modern realities. Anyone any idea when they are going to scrap this nonsense of two child policy?

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[Appix]

Even without birth restrictions the birth rate will continue to plummet without radical intervention to stabilize the ship. Not amused with Beijings natalist policies.

 

[quantumlight]

Even without birth restrictions the birth rate will continue to plummet without radical intervention to stabilize the ship. Not amused with Beijings natalist policies.