Human resources need more investment

The demographic dividend has served as an important engine for China's economic boom in the past decades. The high percentage of working age people and the small proportion of elderly that needed support and care meant China had a favorable population structure to support economic growth.

But it needs to be pointed out that this kind of population structure alone cannot promote growth, and other factors, of which a proper economic system is the most important, are also necessary. So the past three decades of remarkable economic growth can be attributed to the combined effects of its demographic dividend and the government's constant efforts to push forward economic reforms. In fact, according to calculations by Jiang Xiangqun, a professor at the School of Sociology and Population Studies, Renmin University of China, the demographic dividend contributed 27 percent of GDP growth per capita.

But China is now facing a challenging situation, Jiang says, as the dependency ratio of the population will begin to rise in 2013 and its demographic dividend will begin to vanish in 2030 when the proportion of working-age people equals the proportion of old and young in the whole population. Jiang worries that as the natural population growth has declined to 4.79 percent China's population will reach its turning point and start to decline by 2040.