As in most of the developed world, in China the ratio of elderly to the number of productive younger people who will support is inexorably climbing. From Tyler Durden at zerohedge.com:
While China has embarked on ambitious plans for economic and military domination over the next several decades, they may end up defeating themselves without a single shot fired – thanks to their longstanding birth restrictions, shrinking fertility rate and exploding elderly population.
Economically speaking, the problem is easy to understand; a shrinking labor pool due to restrictive reproductive laws tends to drive up wages, while a rapidly growing elderly population requires more spending on pensions and health care. “In a worse-case scenario, slowing growth and a labor shortage could leave China unable to care for hundreds of millions of retirees,” notes the Wall Street Journal.
China’s clinging to birth restrictions defies a clear demographic trend: Its workforce is shrinking and the population is rapidly aging. By 2050, there will be 1.3 workers for each retiree, according to official estimates, compared with 2.8 now.
No matter what the government does now, it is too late to significantly change the overall trend because of social attitudes, say demographers such as Gu Baochang, a professor of demography at Renmin University in Beijing. –WSJ
While some experts have argued that slower population growth could mitigate pressure on China to create new jobs as technology increases productivity, others think China is in deep trouble…
“They should have lifted all birth restrictions before 2010,” says Baochang. “Whatever steps they take now, China’s low-fertility trend is no longer reversible.” In three decades, 1/3 of China’s population is predicted to be over the age of 60.