Friday, November 18, 2005

100 million 80 year olds

Working for an industrial company, one constant theme is the shutting of production, particularly in Western Europe and moving it East. Firstly this was to Eastern Europe but increasingly the "forward thinkers" take things straight to China.

China offers prime facilities for factories. Land is cheap, planning permission is easy, environmental controls are relaxed and most of all there is a huge supply of low cost and able labour.

However it is worth noting that China is currently in its population prime. There are relatively few elderly and also as a result of the Chinese Government's one child policy, relatively few children.

The "productive working" population is huge and the vulnerable who need care are quite few. However the future is not so certain for China and all those companies rushing out there.

China seems to be sitting on a demographic timebomb. Like all trends in demographics this can be reversed. However if things don't change China's current working population will turn into an army of pensioners. A recent study http://www.csis.org/media/csis/pubs/grayingkingdom.pdf by the Centre for Strategic and International Studies predicts there will be nearly 100 million people aged 80 or over in China by 2050. The working population by then will have shrunk dramatically and the cultural obsession with male children is resulting in a hugely skewed population (120 boys for every 100 girls). China in a few decades may look quite different- full of pensioners as well as some frustrated young men !

Will the western companies who are currently rushing to Shanghai,Bejiing, Guangdong and beyond, be in so much of a hurry to pick up the massive pension burden of today's Chinese workers ?

1 comment:

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