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Ageing population cannot be ignored

By Guo Zhe (China Daily)
Updated: 2006-12-19 10:18

Without proper handling, the ageing problem could trigger dire consequences.

As the number of senior citizens increases, the government will have to spend more on pensions. Government expenditure on retirement pensions increased by 37.4 times from 1982 to 2000.

Medical care and daily nursing for senior citizens would also see a huge increase in demand, which should be taken care of within the community.

Senior citizens also have needs in terms of entertainment, community participation and other forms of recreation.

Under the market economy, senior citizens will face a larger risk of being exposed to poverty, and the authorities will be called on to deal with this problem.

Some experts claimed China would have a 15-year "golden period" from this point on because there are 10 million people of working age, making the country's population age structure fitful for harvesting a "demographic dividend."

According to recent demographic research, nations in which a relatively large share of the population have reached the prime age for working and saving may enjoy a boost to income growth stemming from the higher share of the population that is working, from the accelerated accumulation of capital, and from reduced spending on dependents. This phenomenon is known as the "demographic dividend."

Experts suggest that the country should make good use of the time because the combined effect of this "dividend" and effective policies in other areas can stimulate economic growth and settle the problems caused by an ageing population.

However, these experts seem to forget that there will not be such a dividend if the labourers do not have adequate positions or cannot earn good money from their work.

The current situation in China is that the unemployment rate worsens every year. Many cannot find a position and the average salary cannot be increased significantly.

To make things worse, education is more expensive for most families since the beginning of the practice to make education "marketized." Accordingly, more children, especially those from rural areas, lose their chance of getting educated. As a result, the average new worker that comes of age does not have adequate education qualifications.

Hence, China has a lot of problems to tackle before it has a chance to enjoy the so-called "demographic dividend" like the developed countries.

A real fix for cushioning the shock on economic growth posed by the ageing population is to make good use of resources and time at this moment to construct a social security system covering all citizens without difference.
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