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.
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.