Economic Implications of an Aging China

The Economist recently published an article exploring the economic implications of the declining fertility rate in China. The fertility rate in China has declined sharply in the past 30 years, from 2.6 to 1.56. Additionally, the elderly population continues to rise; it is projected that by 2050, 26% of China's population will be over 65. This trend will have broad and severe consequences for the country. Similar to the social security crisis happening in America (in which it is projected that there will not be enough individuals in the work force to pay for the pensions of elderly Americans), China will be facing a similar problem but on a much larger scale. Additionally, with China’s one-child policy, the country will face a “4-2-1-phenomenon”, in which one child must take care of four grandparents in addition to their two parents. With most individuals lacking the financial resources to shoulder this heavy burden, the elderly will have to rely on social security pensions, a system that is already in peril.
SSDAN Office

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