China has officially lifted its one-child policy as part of their 13th Five Year Plan. The issue is whether the colossal demographic consequences on economic growth can find solutions. As they replace it with a "two-baby" policy, the piercing question is whether they will ever learn and what can be done to meet economic growth targets in spite of having created the most lopsided population on the planet.
There are 400 million fewer people as a result of the one-child policy. But it is that the very fabric of society that has been turned upside-down as more than 20% of its population is over 55, and the number of younger people is plummeting. China's elderly population will increase by 60% in the next five years, while its working age population, as defined by 20th century standards, will decrease by 35%. By 2050, one-quarter of the world's over-60 population, 454 million seniors, will be Chinese. That means there will be more "senior" Chinese than Americans of any age, and about the same number as all Europeans!
No doubt, then, that three decades of China's draconian one-child policy created this demographic cataclysm. But as Nick Eberstadt of the American Enterprise Institute has shown, the one-child policy merely exacerbated what is now China's old-heavy population. As he notes, countries throughout East Asia have some of the world's lowest birth rates, even in countries that have never had a child control policy. Moreover, this is equally true across Europe and in virtually every country as they modernize, from Brazil to Turkey. However, in China, this general trend has been amplified, as though on steroids, due to the one-child policy. The result has been economic catastrophe and a recipe for social upheaval unlike any seen before in the world. Suddenly, for the first time in history, there are Chinese families consisting of two generations of only children, with the entire upending of family and social structure.
Repealing the one-child policy is of course to be encouraged, but will not do the trick for Chinese growth goals in their 13th Five Year Plan. What Chinese authorities really needs to focus on for short term growth is how to keep its colossal aging population healthy, active, and productive.
There are 3 initiatives that would form the foundation of an economic growth strategy:
China's next economic miracle: embracing older workers and consumers. China's economic transformation is the most important growth story of the past half-century. Since liberalizing its markets, the country has been transformed into the world's economic juggernaut, with GDP growth averaging nearly 10% per year for the last several decades.
Leveraging its aging population to sustain this growth will be an even more significant transformation. The only way China can continue its economic viability is if it taps into the overlooked skills and knowledge of its older citizens with training programs and learning opportunities. This is true of the U.S., too, but the problem looms much larger in China. One quick solution is literally and immediately to get rid of the idea of retirement itself.
Making China's megacities age friendly. China added more than 500 million people to its cities in the past 35 years, in a wave of urbanization that will continue in the coming decades. By 2025, 46 of the world's largest 200 cities will be located in China.
As the population ages, these hubs will need to become leaders in keeping seniors active, employed and engaged with those around them. If these older citizens are valued and given avenues to contribute to their communities, then China's surging urbanization will help both old and young.
Further, Chinese cities could become global leaders in dealing with the challenges of much longer lifespans. And if you need another reason, consider that cities with populations over 10 million (there are currently 15) have much higher GDP per capita than other areas. To keep these economic engines running, China must engage with its older workers.
Enabling healthier aging. Now that medical advances have thwarted many of the communicable diseases that once cut lives short, we face the challenge of enabling a healthy aging process. This is a global challenge, but nowhere is it more evident than China, where 82% of the disease burden comes from non-communicable diseases like diabetes, stroke and cancer. But there are two other equally huge places the Chinese have direct interest in transforming: First, if Alzheimer's is a global challenge, the aging of China's population will ensure it becomes their fiscal nightmare. As the Chinese lead the G-20 next year they would be well placed to lead the global fight to find the cure for Alzheimer's. Second, the Chinese might focus on the WHO Report just released, that targets health policy to address functional ability. If health strategies can mitigate the natural deterioration of our skin, vision, hearing, muscle, and bones then we will have lifted hundreds of millions into the possibility of remaining active and healthier longer.
Sure, repeal the one-baby policy; do not replace it; and, immediately and urgently take the steps for a healthier and more active aging of its massively older population.