Special issue: challenges of population ageing in China

In 2012, the Chinese government announced Two Centennial Goals. The first is to double the 2010 GDP and per capita income for both urban and rural residents by 2021, the year when the Chinese Communist Party (CCP) celebrates its centenary. And, the second is to build China into a fully developed country that is prosperous, powerful, democratic, culturally advanced and harmonious by 2049, the year when the People’s Republic of China (PRC) celebrates its centenary. It looks that China is well on track achieving the first Centennial Goal, as its GDP grew by 7.4% per annum between 2010 and 2018. There are greater uncertainties, however, surrounding the path to the second Centennial Goal. One of the greatest challenges facing the Chinese economy over the coming decades is population ageing. During the past 40 years, the Chinese economy enjoyed the so-called ‘demographic dividend’, as the dependency ratio declined from close to four-fifths in 1980 to one-third in 2010. But now the population is already ageing rapidly, as working-age population declines by 8 million but old population increases by 12 million a year currently. Population ageing would generate a series of important policy implications, including declining labor supply, weakening consumption demand, falling household saving and growing social security spending. Will China be able to effectively address these challenges of population ageing and continue robust economic development in the coming three decades? This is the common theme of this special issue. The challenges posed by ageing are quite serious in China (Lei 2020). One, not only the dependency ratio is rising very rapidly, but the proportion of the oldest old population is also growing quickly. Two, even with easing of the policy controls over birth, there is no strong evidence that the fertility rate would rise as a result. And, three, compared with other countries that also experiencing population ageing, China suffers from the additional problem of ‘getting old before becoming rich.’ The findings by studies included in this Special Issue are mixed. The falling labor supply, for instance, could be mitigated by the effective application and implementation of artificial intelligence (AI) (Zhou et al., 2020). Over the next three decades, China’s working-age population may decline by 170–260 million. But AI may substitute 200–330 million workers, if China is able to effectively take advantage of the Fourth Industrial Revolution. Of course, the substitutability of different professions differs significantly. The substitution elasticities are particularly low for those professions requiring individual attention.