Focus topics

Rapidly aging population slows growth

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  • The Chinese population is aging at an alarming speed and scale. In WHO definitions, China became an “aged society” (population aged 65 and above accounting for over 14 percent of the total population) in 2021. With the current fertility rate, which is ranked among the lowest of all countries despite the relaxation of the long-running family planning policy, it might take China only 9 years to transfer from an “aged society” to a “super aged society” (population aged 65 and above accounting for 21 percent of the total population), a process that took Japan 12 years and Germany 36 years. By around 2050, there will be one person aged over 65 in every three Chinese.​
  • Along with this fast-aging trend, China’s working population (aged between 15 and 64) reached its peak in 2013 and then started to drop rapidly. It is estimated that the working force will reduce to 59 percent of the total population by 2050. This signals a shift from a “demographic dividend” to “demographic burden” marked by rising labor costs, low saving and investment rates, and pressure on the social security systems. All factors put significant pressure on economic growth. ​
  • The fast-aging population is further stressing China’s already underfunded pension system. China Academy of Social Sciences estimates that the state pension will become insolvent by 2035 if nothing changes. The government sought to reform pension management in 2022 by introducing a new private pension scheme.
  • Raising the retirement age appears more often lately in high-level meetings, bringing a new sense of urgency to the topic. It is widely expected that a new retirement plan will be unveiled this year to gradually raise the retirement age to probably 65 for both genders, which could help to slow down the decline in labor supply and bring additional consumption demand.  ​
  • The rise of a “silver economy” seems to be the silver lining. It is estimated that the silver economy will grow from currently 8 percent of GDP (RMB 10 trillion) to 20 percent of GDP in 2030 and one-third of GDP in 2050. State-backed think tank China Research Center on Aging reconceptualizes the silver economy as a whole new economic system with reforms needed on the structural level rather than a mere addition of dimensions for the elderly to the current system. China will likely become the world’s biggest playing field for the silver economy, bringing new opportunities for businesses.​

Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.


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