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Society & Culture

Implications of an Older Population

Jun 21, 2021
  • Li Zheng

    Assistant Research Processor, China Institutes of Contemporary International Relations

Recently, the U.S. and China published the initial results of their respective decennial censuses. The two countries have much in common in those results. Population growth rates have fallen sharply in both to their lowest levels in decades. The average age of the Chinese and American populations are about the same — around 38 years. The results also reflected the demographic changes in the world overall. With slow population growth, both China and the U.S. face the pressure of population aging to varying degrees. It adds new uncertainties to China-U.S. relations.

The pandemic delayed the publication of census results in the U.S. for several months. In the decade from 2010 to 2020, the U.S. population grew by 7.4 percent. The figure was higher only during the Great Depression of the 1930s. Three states experienced a net decline in population, a record since 1980. More data will be released when the final results are available in August.

China published the results of its seventh national census on May 11. Its population grew by 5.38 percent over the past decade, the lowest rate in nearly a half-century. The census found that 18.7 percent of Chinese people are 60 years old or more, and 13.5 percent are 65 years old or more, an indicator of overall population aging. At the end of May, China announced a universal three-child policy — an important policy shift triggered by the census. 

In recent years, the aging of China has attracted extensive attention in American media and academic circles. According to some, an older average age will deprive China of its demographic dividend and put pressure on its social safety net. It will significantly increase labor costs, leading to decreased global competitiveness in manufacturing, which will then affect China’s medium- to long-term growth potential and delay the country’s drive to catch up with the U.S. in economic aggregates.

Some others believe that aging will gradually change the social ecology in China and weaken its innovative vitality. According to some American think tanks, declining birthrates combined with population aging will make it more difficult for China to recruit soldiers, thereby undermining its military potential and strategic direction in the medium and long term.

These views reflect strategic misperceptions of China as seen from from the U.S., which looks for its weaknesses as a generally developing country and then uses those weaknesses to support the argument that its development is bound to slow down or stagnate. Population aging seems to be the latest point of penetration found.

But the observation neglects the fact that China is a super large economy with a super large population. It also underestimates the power of the Chinese political system to deal with major challenges. Even as the senior citizens population expands, China still has a working population of 880 million, more than twice the total U.S. population. Significant improvements in population quality will also increase the competitiveness of the labor force.

The misperceptions may raise new risks for China-U.S. relations. For example, the recent Global Trends 2040, which reflects the view of the U.S. intelligence community, cites population aging in China as a decisive variable. In one scenario, the U.S. builds up a circle of democracies as China’s economy stalls because of population aging.

In another view, population aging will “quickly close the window for China to use military force externally,” thus increasing the country’s sense of urgency to use military means to resolve territorial issues bearing on core interests.

The former argument is a disguised China-collapse theory that’s based on a significant underestimate of the country’s reform potential with regard to population aging. The latter is a new type of China-adventure theory, which is visibly different from China’s diplomatic philosophy and practices, which promote global peace and common development. These two judgments, which are based purely on brainstorming, may lead to mistakes by American decision-makers in perceiving China and then brew new twists and turns in U.S. relations with it.

In fact, aging is a challenge not only for China and the U.S. but also for the whole world. Compared with other global issues such as climate change and the risks of cutting-edge technologies, the broader implications of population aging and its long-term impact on the political ecology of all nations are less well-understood by the international community.

Most developed countries have aging populations and face labor shortages, while most of the least-developed ones have the fastest population growth. This huge disparity in wealth and population distribution will inevitably lead to cross-border movements of people. At the same time, aging will also mean enormous added demand and social burdens in the fields of medical care, rehabilitation and home care. At present, the operating costs in these areas are prohibitively high. It will take international cooperation to promote technological innovation so that older people in more countries can be properly looked after.

In addition, aging also puts great pressure on pension funds. Financial institutions need to guarantee the sustainability of pensions through new product design and investment channels.

On these issues, China and the U.S. face a similar situation, and they have plenty of room for cooperation to address common interests. As the aging populations grow in both countries, the impact on their respective agendas will become more pronounced. The two should therefore take the initiative to explore cooperation on this topic. This could include how to make full use of the two countries’ respective comparative advantages, how to promote further two-way opening up of the financial market and how to avoid political interference in pension investment.

In dealing with uneven population growth, China and the U.S. also need to work together to advance the international community’s response to such global problems as extreme poverty, food security and refugee flows. They should advance the United Nations Sustainable Development Agenda with a greater determination and a shared will to gradually alleviate the long-term international impact of this problem.

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