No one watching the Olympics this week has any doubt about China's economic prowess. But one economist attributes China's success to a population that is almost entirely in its prime working years pouring collective energies into the productivity furnace.
"Cai Fang, an economist who is director of the Institute of Population and Labor Economics with the Chinese Academy of Social Sciences, has calculated that more than a fourth of China's economic growth in this reform era stemmed from the productivity of a workforce with few dependents younger than 15 or older than 65. In five years, that advantage will start disappearing, and a rising number of the elderly will slow down China's economic growth, Cai said," Jim Landers of the Dallas Morning News reports.
China's population is aging faster than any that of other country in the world. It will have 400 million people age 60 and older by 2020, and 100 million older than 80. By 2050, a third of the 1.4 billion Chinese will be at least 60.
In most of Asia, the family and the individual are expected to jointly take care of their own retirement needs. But China and Japan are the exceptions to this rule, according to a survey of over 21,000 people in 25 countries and territories by HSBC Insurance and the Oxford Institute of Ageing. In China, government is seen as the most important contributor to retirement income. A reported 90 percent of workers are eligible for China's basic social security plan. Self and family are the second most important factors for retirement security, while the employer is least important, HSBC found. (In all of North America, the individual alone is seen as the dominant contributor to retirement income.)
While the United States has just above two children per couple, each Chinese couple is allowed only one child. And China's generation made up almost completely of only children is now entering the workforce. Many young people are leaving their parents in search of greater economic opportunities in China's cities, further removing modern China from the culture in which children were once expected to care for their parents when they reached retirement age.
But Chinese workers are optimistic about their retirement preparedness. A different survey of 26 countries by wealth management and insurance firm AXA Group found that 80 percent of working people in China think their retirement income will be sufficient, the highest proportion among all the surveyed countries. The "Chinese have the highest aspirations and are amongst the most optimistic in the world towards living a happy retirement life," says Jamie McCarry, president and CEO of AXA-MM. "They want to travel, be active, participate in sports, leave an inheritance for their children, and people want to retire earlier—at 53—than all countries surveyed."