A huge challenge for China going forward will be its aging population. Courtesy of the “one child” policy and the improvements in living conditions and health care that come with its economic rise, there will be fewer and fewer Chinese to take care of a growing population of nonworking seniors. By the middle of this century, China will probably have stockpiled more retirees that America’s total projected population by that time!
The geostrategic consultancy firm Wikistrat, where I’m a contributing analyst, is running a simulation about China’s future right now with an emphasis on everything that could inhibit the country’s growth rates. The aging population factor was raised by Nicholas Kokkinos who points out that, “The effects on labor supply of a reduced workforce will drive up wages, leading to shifts in demographics and urbanization, as firms move inland or elsewhere in Asia and Africa.”
Already, labor costs in China are rising fast, compelling foreign manufacturers to move production elsewhere. If, in the absence of an extended safety net, the current generation of workers has to spend even more on the care of their parents and grandparents in the near future, they will demand higher salaries, making them all the less competitive if their level of skill doesn’t keep up.
But wait, there’s hope! (For China’s economy anyway, definitely not its seniors.) According T. Michael Lutas and Matthew Garcia, who blogs at Hydro-Logic, pollution could take care of this problem.
Put very simply, if you’re sick from the air you breathe, the water you drink and the food you eat, the chances of you fulfilling your potential decline.
“If the race is for China to get rich before it gets old, pollution is an unacknowledged competitor,” they write.
Cynical? You bet. It may be difficult to gauge the exact effect that pollution has on the life expectancy of Chinese seniors but there’s little doubt that effect it has.
As always, there’s a tradeoff. “Those still growing up while the pollution is at its worst will suffer the damage of a shortened life span.” So the very group that it supposed to finance China’s elderly in the future could be reduced as well. Which takes us back to where we started.