Is Japan’s ageing population a prediction for China?
By: Current Chinese
Tags: Japan, Ageing, Population, China, Economic Development

Photo by Johnny Cohen on Unsplash

All the developments we have introduced in healthcare in the past 150 years are paying off big time. In Western Europe, we now have a life expectancy of 79 years for men and 84 years for women.

Many of the diseases that were considered deadly in the past, now can be treated.

We have access to care when needed and hygiene has improved too.

We therefore have the privilege to live knowing that we have good chances to survive if we get sick.

This is a privilege our ancestors did not enjoy.

However, it comes at a price.

The world’s population is ageing.

An ageing population is a problem because it means there is a larger portion of the population that is not productive, and also needs to be taken care of.

This can lead to labour shortages.

The ageing problem is particularly severe in developed countries, and China is no stranger to it.

The one-child policy effect

The one-child policy of the ‘80s sped up an ageing process that had already started and led to a steep decline in population growth, which now creates a bottleneck effect.

The vast majority of Chinese only-child millennials will have to take care of both their parents. That means that every Chinese couple has 4 elderly to take care of.

Sometimes these senior citizens are living in different places than where their children live, sometimes they have siblings that also need care. And sometimes the couples also have their own kids to care of, and must still cope with the demands of a stressful fast-paced job.

In other words, China finds itself with too many elderly to take care of, too suddenly, and too few youngsters to take care of them.

China tried to boost its births by removing the one-child policy in 2015.

However, the country did not see any significant population growth as a result.

A generation of one-child policy has changed child nurturing behaviour and, to a good extent, society. It is now perfectly normal to dedicate all your resources to the education of one child to give them a chance to thrive in this ultra competitive world.

The other reason is that every child has become unprecedently expensive and most people cannot afford a second one.

China’s rapid ageing will pose two key strategic challenges for the country: sustaining economic growth and providing old-age security for the fast-growing elderly population.

Japan’s ageing vs China’s

Some experts have compared China’s trajectory to Japan’s.

Japan is the country with the oldest population on Earth.

People aged 65 and older in Japan make up a quarter of its total population, estimated to reach a third by 2050.

They also went through a phase of exciting economic development after the Second World War. In the 1980s there was even talk about the potential of Japan’s economy to become bigger than America’s one day.

However, Japan’s population aged very fast, and now it is declining.

Its economy followed a similar trend.

There are different reasons for Japan’s steep ageing that we will not explore here.

We do want to highlight some aspects that will help us compare Japan’s and China’s situation.

When Japan got “old”, the country was already fully developed.

China on the contrary, isn’t quite yet fully developed. As experts put it, “China will get old before it gets rich”.

These different “entry points” to ageing populations come with big consequences.

Since Japan was already well developed once its ageing problem became important, the younger generations had a similar level of education to the older ones.

On the contrary, in China, the education gap between younger and older generations is huge.

Those who are now in the workforce are highly educated and specialized, while their grandparents were hardly educated at all.

The education gap gives hope that the younger generations will deliver strong productivity growth fo0r the country in the years to come.

In that sense, we might see China move from a workforce model that was focusing on cheap labour and large volumes of products to one that is focused on quality of service and innovation.

Indeed, in China the number of people in the workforce is falling, but working age human capital is increasing.

More broadly, the fact that China is still developing means that there is still a lot of room for growth before it plateaus, which gives confidence China will be able to sustain its economic growth in the years to come.

Immigration could also play a role in helping China to sustain its economic growth.

Japan has tried to play the immigration card already, and managed to double its foreign workers since 2013. It is still too early to see effects on population growth.

China has also started to attract foreign workers, although not as aggressively as Japan.

Culturally, both countries have a long way to go before becoming the kind of foreigner-friendly destinations that attract highly skilled expats in high numbers.

Another important aspect any country with an ageing problem must balance is pensions.

Too much emphasis on pensions means that too big a slice of a country’s resources is taken away from those areas that produce economic growth and jobs, too little emphasis means the old don’t have the means to support themselves.

In China, unlike Japan, pension promises have been kept low. This avoids allocating too much resources to the old and choking the young in the process.

So how will the elderly be taken care of?

There are different ways China is looking to solve that problem.

For wealthy seniors, the most straightforward way to spend their last years in peace and comfort is to move to a care home.

China’s care home market is booming, offering impeccable quality of service and hygiene.

It also gives senior citizens an environment where they can socialize with one another.

However, not everyone can afford to live in a care home. Typically, only retired public servants can.

More and more nurses are being recruited to take care of the increasing numbers of elderly people. But once again, turning too big a percentage of the workforce into nurses for the elderly would take away talent from other important areas.

Japan is planning to solve this problem using robots to care for their eldery.

The Japanese achieved good levels of innovation in the field of robotics to make this a goal and not just a dream.

The problem however is that senior people are still people, and they need company and psychological care just like anyone else. In this regard, robots offer no good solutions.

For a more systematic and “human” care of its elderly, China is betting hard on its filial culture, whereby it is entirely normal (and to a certain extent expected) that children take care of their parents when they are old.

Shifting the burden of the elderly on their own families is something developing countries are used to. However, things have changed since China embarked on its wild industrialization journey starting from the 80s.

The mass movements of people towards urban areas and the increased competitiveness of the job market have disrupted the filial culture, which will need revamping and more support to work on a big scale.

Conclusion

In conclusion, China and Japan’s situation are comparable but different.

The world is looking at how China is dealing with its own ageing crisis with a curious eye.

What they see is a country that is adjusting their economic model to its population’s age.

In fact, China is shifting its focus on large availability of large, cheap labour towards becoming a highly specialized and technological country focused on quality of talent.

The shift in types of job from manual to intellectual should suit an ageing population, and the improved productivity growth should ensure its workforce can support its growing senior population while still fuelling growth for the country.

Whether this approach will work in the long term, only time can tell.

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