By Enrico Verga, a writer, consultant, and entrepreneur based in Milan. As a consultant, he concentrates on firms interested in opportunities in international and digital markets. His articles have appeared in Il Sole 24 Ore, Capo Horn, Longitude, Il Fatto Quotidiano, and many other publications. You can follow him on Twitter @enricoverga.
In 1716, Christopher Bullock said, “’Tis impossible to be sure of anything but Death and Taxes.”
But before death comes old age. China is no exception, and many are concerned about the ramifications, not least the leadership of the Asiatic Dragon.
A Brief Step Back in Time
The father of the Chinese state, Mao Zedong, had an expansive vision of the future, anticipating that the Chinese would in time have a strong presence throughout the world. Consistent with this dream, his policies promoted large families. The fertility rate (the number of births per woman) stabilized around 5.9 in the 1970s.
The pace was unsustainable and in his last years, Mao proposed a new vision: Wan, Xi, Shao (“later, longer, fewer”). The new program aimed at slowing the birth rate by encouraging people to live longer with less children, and in fact it was not unsuccessful.
Nevertheless, Mao’s successor Deng Xiaoping opted for a stricter approach. Around 1980, the one-child policy was instituted throughout China. Judging by the intimacy of its reach and the sheer number of individuals affected, it could be considered the most extensive social engineering operation in the history of the world. In view of the current state of China, it will not be the last such operation.
According to quantitative analyses produced by the Chinese government (which should be examined seriously, but must be taken with a grain of salt given the government’s track record massaging figures), this policy has impeded approximately 400 million births.
The Current Situation
One result has been an aberration in the gender of newborns. There are no reliable figures for the number of abortions that have taken place in China in order to make sure that boys are born rather than girls. There is now a surplus of circa 60 million males, who will often experience serious problems finding romantic partners.
In addition to these issues, there is a less visible trend: aunts and uncles are disappearing – after all, if you are an only child, you have no siblings. This phenomenon has frayed the fabric of rural life, propelling more towards the cities and suburban centers. The tradition of children caring for their elderly parents in homes was once a familiar sight (as in Europe), but is now fading away.
A child that is born now will, in about twenty years, (averaging the contributions of those who do and do not undertake advanced studies), turn into a “worker unit” that produces income, pays taxes, and underpins social services, including provision for the elderly. Given the demographic premises just explained, the problem of a potential collapse in the work force is acute and explosive. It is a not-unforeseen tragedy in the making, one China is trying desperately to stave off.
Increasing the Birthrate?
Recently, the Chinese government has decided to end the one-child policy. The current birthrate is reported as 1.5 per woman, while to maintain a stable population the rate should be approximately 2.1. Earlier policies have created an abnormal generational pattern, with at least one generation that will have to support a disproportionate number of seniors. The Chinese are therefore to be encouraged to have more children.
This could be more difficult than is generally assumed.
The more well-off Chinese have absorbed into their worldview the idea that multiple children are an investment of time and money that is ultimately unaffordable. The Chinese megacities are extremely socially competitive, with the costs of high class schools in the stratosphere.
There is a rich elite that might decide to have a few more children, although of course not at the rate of times past. Meanwhile, the emerging bourgeoisie, intent on clawing its way up the social ladder, sees one child as an expensive investment and two as insanity.
An aging China is thus not an issue that can be addressed by simply dropping the older policies. At the same time, the implications are serious.
Certainly the Japanese outlook is rather bleak, as seen vividly in this NYT portrait a couple of years ago of a rapidly aging nation in which entire villages are abandoned.
For China, the demographic collapse would mean a loss of productive power, with possible implications for military credibility. Current estimates indicate that by 2050, the Dragon’s next door neighbor, India, will be the nation with the most youth in the world. It will face a China in decline.
On the internal front, the problems are even more serious.
Chinese policies have moved 250 million people into urban centers, another social experiment that could have taken place nowhere else. One of the purposes of this “forced urbanization” strategy could be more efficient management of public resources in ways that might benefit the forthcoming elderly. The new urban population could be “educated” into buying more goods “made in China,” so as to create a stable demand for domestic goods and services. But while the idea seems promising, putting it into action is another matter. An aging population could work at cross-purposes to the consumption patterns required. Nor, statistically speaking, will an elderly China produce as many excellent students.
All of this is in addition to the fundamental problem of the costs of caring for an enlarged population of seniors.
While the issues seem fundamentally difficult, there is nonetheless a patchwork of measures that could potentially alleviate the demographic crisis, given that the Chinese are very competent at applying ideas on a systemic scale.
Industry 4.0 could address the looming void of workers in Chinese factories: human work could in theory be substituted, at least in part, by robotic labor.
On paper it seems like a great idea. However, it has to be kept in mind that the employment crisis does not involve factories with a high level of technological inputs, but rather the opposite, and plausibly this will continue to be the case. Chinese employers have made out well during recent decades due to a favorable conjunction of low salaries, exploitation of non-specialized labor, and rural to urban migration. It is hard to imagine them now turning around and investing in supertechnology.
Industrial China is also trying out another model for substitution of Chinese labor. The idea is to use labor forces from countries where China wishes to produce and sell products. This notion has been bruited about for years: the Guardian was already outlining it in 2009. While the approach is an interesting one, it is embryonic at this point – up to now, Chinese efforts “away from home” have been primarily focused on attempts to lower the cost of goods sold by cutting out the costs of sea transport, rather than on hiring local workers.
If solutions to the economic and social problems associated with an aging population cannot be found soon, it is plausible that another rather drastic solution will be informally considered by the authorities.
This study shows an alarming picture of suicides among the Chinese population. The rate is particularly high among the rural elderly.
Since reliable statistics (as mentioned above) do not exist, it is possible that the incidence of suicides is above what the local media report. A recent study published in Nature supports this idea.
Given what we do know about the numbers, it is unsurprising to learn that many Chinese have distinctly open minds on the subject of euthanasia, as the China Daily reported already in 2013.
Although officially illegal, it would not be too shocking if, over time, discreetly and without fanfare, certain local authorities were to become more permissive (or negligent) in allowing their elderly Chinese citizens to accelerate their final march towards a glorious future.
The One Child Policy took a huge chunk out of the Chinese population, but all the evidence I’ve seen is that Chinese demographics will follow the same trend as elsewhere in Asia – a very sharp fall to under the replacement rate as soon as the country approaches ‘developed’ status. The reason isn’t hard to see – the lack of support for working mothers, expensive schools and childcare (unless you are fortunate enough to have healthy grandparents) and poor social supports means that it makes sense to postpone having children, and then only have one or two when you do. But China has possibly made the demographic transition worse by ‘forcing’ it by the One Child Policy. Another key issue of course is housing costs, which means both partners in a marriage have little choice but to work.
Taiwan has already quite successfully transitioned, mostly by off-shoring its most labour intensive industries to China itself. It has also adopted some (by Asian standards) progressive policies such as its national insurance system for healthcare. But there seems to be strong cultural and social reasons why a more social democratic approach to the problem – subsidised childcare and generous time off for parents – is unlikely to be applied in China. Nor of course is there the slightest chance of a mass immigration policy.
I suspect the main approach will be to use countries like Indonesia, the Philippines and much of Africa for off-shoring Chinese owned businesses, just as Japan and South Korea have done. But the problem of course is the sheer scale of China – there just aren’t countries (except maybe India) big enough to do this.
As for the social implications, I suspect its bad news for the elderly. There are enormous social pressures on young Chinese to look after their parents, and many will do so, even at the expense of their own health and wellbeing. But I suspect many will be quite ruthless too, so I would expect a suspicious rise in mortality rates among the older. It was often said that Pneumonia was the old mans friend – at least up to the time when the medical industrial complex discovered there was lots of money in keeping the elderly alive. The Chinese, I suspect, will ensure that there is no built in financial incentive to keep the elderly going.
So which type of approach chinese will “deply” to avoid a “grey bubble” to grows?
August 24, 2015
If Japan’s Workforce Is Struggling to Support a Growing Elderly Population, Why Are They Working Fewer Hours?
— Dean Baker
I suspect a lot of Chinese will follow the guidance of this Taiwanese lady – she sued her son!
From the NYT:
Parents are legally prohibited from abandoning their children.
Not abandoning parents will be nicely symmetrical.
“When there is no love, no desire in the heart, there is the law.”
Where law enforcement is lax, the option is to retain the kids’ inheritance until the very end, because when there is no money, there is no parental elderly care.
Giving that money away too soon, and the daughter-in-law won’t even bother to say hi.
So, continuing this line of logic regarding responsibility, does that mean that we babyboomers will be subject to a massive class action by millenials for overpopulating, over-exploiting, polluting and generally f…… Up the planet?
If not, we should be, because we scientists have been railing against this narcissistic and utterly myopic insanity for years, so it is not a sudden realisation.
Not that it would achieve anything – extinction is forever, and we humans have created the 6th great species extinction of the history of planet Earth. And we think we are so f…… Clever… AAAAGH!
For those with a morbid sense of humor….
Luckily, here in the USA, we’ve employed the opioid industry to help our government deliver on lambert’s 2nd rule of neoliberalism. China is SOOOOO far behind on this front. I have full confidence that they will soon see the wisdom and brutal efficiency of improving the demographic profile using the methids that we are here in the USA.
mmm i’m not fully expert about opioid pandemia that is taking place there.
How much longer before well off lonely heart Chinese men get tempted with male order American women that desire them, not all that different from the hordes of beautiful* Russian women that made it to our shores after the Soviet Union fell.
* in the days of the USSR, no photo was ever allowed of any Soviet woman with less than 3 chins, in the west. Unless it was the Olympics.
From the mid 80’s:
SO chinese machos will invade usa looking for green card and older women? :)
There is already a phenomenon of Chinese men seeking brides in Vietnam and other countries. A lot of discussion of this in China and in surrounding countries.
My own thought is that perhaps, long term, the smart thing to do is to reduce the population substantially as that will help mitigate worse problems down the track such as resource depletion. India having such a large population will not seem such a great idea by then. Besides, does having a population of over a billion ‘consumers’ really seem the best way to go for ‘development’?
One of the normal ways to reduce over-population of young men is to declare war on somebody and send them off to fight. However, it is a non-linear solution that can have unpredictable results (e.g. WW I).
The class warfare the rich are waging on us likely increases the risk of a real fascist leader coming from the shadows into government.
Trump is just a self serving narcissistic type, but there are surely others waiting. That is the real danger.
It strikes me as decidedly odd for an article on a topic of this nature not to remark on China’s continuing overpopulation problem. China’s birth rate is such that its population will eventually decline, but that population is still growing and is huge: much of China is densely populated and the pressure on natural resources and environmental quality is enormous.
I wonder, too, at the presumptions made for life expectancy among the now old. The elderly in China today are not particularly healthy. Hepatitis and smoking related diseases are very common. Health is likely to improve dramatically as cohorts not exposed to extreme poverty emerge, but that will be a good problem to have.
Finally, just how many in China remain outside the modern urban economy? How large is the pool that has never been drawn off the farm and into developed China? What is this labor shortage for factories? It seems at odds with the trajectories of labor in manufacturing.
While I acknowledge ignorance of China’s particularities, aren’t the basic paradigms underlying this article simply “more is better” and “without more, the future is bleak”? The planet’s ability to carry a given population was reached some time ago, and (probably unforeseeable) socio-economic adjustments are inevitable. What constitutes a “quality of life”, especially concerning non-essential material stuff, will likely be re-examined. Should the species survive another millennium, I believe that the 20th century (roughly considered) will be seen as a demographic aberration.
definitely agree on the smoking part. When my family visits China, my kids are (probably rudely) coughing and frantically waving cigarette smoke out of their faces. In response to a comment further above, we may have opioids, but China still has tobacco–in mass quantities.
China maybe be investing too much vs promoting internal demand, but most of the mega-high rises eventually fill, the roads get more private cars, and the expanding subways and train lines still seem filled up with passengers.
There will be some tough times for the elderly with fewer caretakers and less social and income support. The one child policy will be moving through the metaphorical “python” or I guess “dragon” for some time.
I remain ever amazed that mainstream economists and scientists will talk right past one another on this subject. Pick up an article in the Wall Street Journal and it’s all: growth, growth, growth. Must maintain steady growth. Whereas you pick up the journal Nature and it’s all: sustainable, sustainable, sustainable. Must maintain a steady state of inputs and outputs.
And it’s not like there haven’t been heterodox economists out there shouting the warning from the tree tops for the last two decades or more. The dismal science knows it has a massive logical hole, and yet, the ship exhibits no sign of sinking.
One can only hope that one result of these social experiments (the U.S.’s little BabyBoomer experiment is going to be fun to see resolved by the GenX’ers) is to demonstrate that humans are not immune to the dictates of carrying capacity. We’ve pushed the envelope as far as it will stretch, but those aging chickens are coming home to roost.
i didn’t write the article on WSJ :)
“The new program (Mao’s later, longer, fewer) aimed at slowing the birth rate by encouraging people to live longer with less children, and in fact it was not unsuccessful… (Deng Xiaoping’s one child) the most extensive social engineering operation in the history of the world. In view of the current state of China, it will not be the last such operation…aunts and uncles are disappearing – after all, if you are an only child, you have no siblings. This phenomenon has frayed the fabric of rural life…”
One wonders whether Mao’s and Deng’s elite planners entertained the possibility of the consequences now facing China. The Peoples Republic archives on the policy discussions at the time, if existent and open to perusal, would offer a fascinating study in the continuing annals of human cognitive dissonance.
As it is the stresses on the social fabric of a country once woven together by extended families and the 70 years of twists and turns of China’s history may prove insurmountable. Since the 1949 revolution and colonial collapse, to a version of communism characterized by totalitarian central planning plus provision of basic welfare services, medical care and education, to the uncharted territory of mixed capitalist economy and unstrung safety net, an incalculable gamble likely destined for chaos has been made, as demographics and environmental pressures converge.
Robotic labor and acceptance of MMT offer some possible option, replete with the irony, i.e. use of, “labor forces from countries where China wishes to produce and sell products.” In other words the industrial jobs transferred overseas during the last 30 years might be returning from China to the US.
As two ends of the socio-economic modeling spectrum, central planning and the invisible hand, lead us toward planetary catastrophe, when does reconciliation through co-operation instead of head butting competition become operative at many levels of human enterprise, including intellectual, economic and national interests?
‘The best lack all conviction, the worst are full of passionate intensity.’
The problems caused by a shrinking population are trivial and ephemeral compared to those caused by overpopulation, which are catastrophic and irreversible.
While Chinese parents may prefer a male child, this preference is not monolithic. A Chinese colleague compared personal ads (for divorced individuals) between Britain and China. One striking thing I noticed in the Chinese ads was a clear preference for a partner with no male children. The reason for this is that parents are expected to buy a home (and car) for their son in order to attract a good mate, as well as provide other types of financial assistance. So, a woman will prefer a divorced man with a daughter over one with a son. Also, if you look at a Chinese personal ad, the bulk of the ad states financial and professional qualifications and demands. There is virtually no personal/social info such as “like taking long walks on the beach”. I was shocked. It’s seems more like entering a business merger than seeking an emotionally compatible partner.
While it is the conventional wisdom that a rapid decline in population will reduce prosperity, history does not show this.
For example, following the black death, which had a 30-60% mortality rate in Europe, prosperity increased, since labor became scarcer and (econ 101) more valuable. (In fact, we know the plague hit Poland from the increase in wages)
In fact, productivity roughly doubled, and more of the productive output of society went to ordinary peasants, despite an attempt to legislate lower wages by the elites.
Obviously, in a modern welfare state, if the average retiree is supported by fewer workers, then that worker contribution will necessarily increase, but the median worker’s wage will increase as well.
Clearly, there are losers when population declines, but they tend to be at the top of the pyramid, and they can suck it up and live with it.
Ergo Brexity and Trump.
The corporations and elites want open borders and immigration. The working class wants closed borders and reduced immigration.
Not sure that the Chinese should be too concerned about “facing” India in 30 years time. I’ll eat my hat if India is a viable, unitary state in 2050. It’s well on its way to ecological collapse and it’s too high population growth, insane poverty and inequality are more likely to lead to civil war than a robust challenge to Chinese regional supremacy.
+1. And don’t forget the caste system. That will rear its ugly head from time to time.
People just don’t get it. India is a big illusion.
Having traveled to India several times extensively and a number of Indian friends, I am always amazed at how India works as well as does it in spite of itself.
Ditto the shocking indifference even craven attitude more even moderately affluent Indians have toward other Indians especially the poor, minorities, lower castes (e.g., Dalits), and religious minorities.
It includes people getting hit and run over by a car with no one stopping or even attending to the woman who was hit. Ditto watching 2 men working on electric transformer only to get crushed beneath it when it fell to the ground.
There wasn’t much concern about the two dead men. Instead, the local police who arrived along with utility repairmen were more worried about the damaged transformer and live wires. Mangled corpses laid there for at least 5-6 hours getting bloated and disfigured in the heat & humidity before they were removed like a dead cow or animal in the roadway.
Given the violent history of China, I expect this to be resolved through violent means, perhaps hidden through a transition to democracy. Let’s say that happens. China at 600 million people and fully unleashed is still a much more potent force than most other countries. I am trying hard not to stereotype here, but never underestimate the toughness of ordinary Chinese people. They’ve been literally subjected to a ton of abuse the last century and they are still standing.
We are still in 20th century which did NOT end with the fall of the Berlin Wall, but will end with the end of the American Empire. I wish it would happen peacefully, but given America’s romance with violence it hardly can be expected. The same can be told about AE’s victims all over the world. Global capitalism’s freedom of choice for the Third World is “you die starved or you die bombed”, people are being forced out of their own countries by the means of both, but neither they are wanted as refugees. When they elect Govts pretending to “fix their own countries by themselves” – all the white racists’ main argument – these Govts. are subverted and overthrown since they need their own countries’ resources for their own economies, and thus they stand on the way of corporate plunder. The US foreign policy has not changed a bit since the Indian Wars, it is still about the same thing: barging into other peoples’ countries, grabbing everything they’ve got and clearing the land of the presence of the natives if they don’t accept to be enslaved or concentrated in reservations. And THIS is what pushes the world back to the World Revolution again, this time with two possible scenarios: first is the world breaking apart – no coffee, no cocoa, no bananas exported, the Third World countries take their own land back, settle their own population to produce for themselves and for domestic market for which they take their own oil and minerals too, no more US dollar as “global currency”, they develop themselves with the technology they can handle and everyone stays COMPLETELY independent from one another. OR we’ve got One Single Global State in which “no human being is illegal”. A transition could be based upon switching from fanatical persecution of the free trade to a search for an equilibrium between free trade and protectionism – for everybody, not just for Trump – which together with respect to Govts’ sovereignty and an International Migrational Treaty could bring the world together in the long-term by the means of reforms. But the fanatics of “freedom and democracy’ would rather blow the world into pieces than letting it all happen and paying for their crimes, so the 21st century may not arrive at all and then we’ll be facing the True End of History.