Will China Get Old Before Getting Rich?
Decades after the enactment of the one-child policy in the 1970s, the Chinese government is now trying to tackle the problem of a fast-aging population. From Darren Wee at The Guardian:
Filial piety is the first of the five Confucian bonds that have traditionally tied Chinese society together; caring for one’s parents in later life is a child’s duty. But these bonds are being broken by China’s rapid development. Life expectancy in the country has soared and the fertility rate has plummeted, putting a heavy financial burden on the next generation.
[…] Part of the government’s plan is to raise the retirement age, which at the moment is 60 for men, 55 for women working in white-collar industries, and 50 for blue-collar female workers. But 93.3% of the 450,000 respondents to a poll on the People’s Daily website were against the idea, while only 2.4% were in favour. This puts the Chinese Communist party in an awkward position, not least because some of the most high-profile corruption scandals in China involved social security funds. In 2006, five Shanghai officials were sacked for misappropriating a third of the city’s 10bn yuan social security fund.
At Reuters, Aileen Wang and Koh Gui Qing look into the huge gap between urban and rural pension systems:
To beat the demographic challenge, Beijing hastened the roll-out in 2009 of a voluntary pension scheme for 657 million rural residents, the equivalent of two United States.
To get a minimum 55 yuan a month in retirement, or a tenth of last year’s average monthly wage in the countryside, rural workers must pay at least 100 yuan a year for 15 years.
[…] In China’s richer eastern provinces, payouts are much higher because workers pay more, and local governments and private firms have the means to match payments. In cities, for example, the monthly pension is 28 times higher at an average 1,531 yuan.
“The ageing population in the countryside is rising faster than urban areas, which could pressure the premature rural pension system,” said Cai Fang, a researcher at the Chinese Academy of Social Sciences, a respected government think-tank.
Aside from financial pressures, the elderly face difficulties such as increased vulnerability to emotional or mental health problems, for which they cannot count on adequate support. From Cang Wei and Song Wenwei at China Daily:
Zhang Chun, director of Nanjing’s Psychological Crisis Intervention Center […] said that many empty-nesters are deceived by the unscrupulous because they are lonely and desperate for human contact.
“Empty-nesters generally have little communication with other people and so there is a higher chance of brain atrophy,” he said. “More attention should be paid to the mental health of the elderly.”
[…] In a recent investigation launched across Jiangsu province, 53.9 percent of empty-nesters described themselves as “useless”, and 58.3 percent felt “very lonely”, according to the Xinhua Daily newspaper in Nanjing.
The mental health of elderly Chinese is deteriorating “unexpectedly quickly”, according to Li Bengong, president of the Gerontological Society of China.
“The battle against illness, the loss of social status, and perplexity about what to do with the rest of their lives are to blame for the deterioration of elderly people’s mental health,” he said.
While government faces the challenge of providing for the graying masses, private businesses are betting that there will be money to be made in caring for the aging rich. From Alex Frew McMillan and Eveline Danubrata at Reuters:
Overseas players including New York-based hedge fund Fortress Investment Group LLC and China Senior Care, backed by one of the principals of U.S. private developer Lerner Enterprises, are also investing in elderly care and retirement facilities, betting that the demographic fallout from China’s one-child policy will soften traditional attitudes towards out-of-home care.
“If you understand the Chinese culture, they’re not about to abandon their old and aged parents in the nursing homes,” Lim Cheok Peng, managing director of the world’s second biggest listed healthcare provider IHH Healthcare Bhd, said in an interview in Singapore.
“Ten to 20 years down the road things may change.”
See also a recent three-part BBC series on China’s aging population, Adam Minter at Bloomberg View on the unpopular prospect of later retirement, and ‘The East is Greying’ on CDT.