In part one of this two-part series, we discussed the serious consequences resulting from young people in Hong Kong residing with and depending financially upon their parents until they are 25 or even 30 years old. This has not only dramatically affected the lifestyle of the young adults but also placed additional burdens on their parents. This "parasitic" relationship, where many young adults live with their parents in a crowded space, may adversely affect the quality of life for all parties concerned.

Moreover, Hong Kong has an aging population. In the next 27 years to 2041 our population will grow from 7.2 million to 8.5 million while the elderly - those aged 65 and over - will surge from 1 million to 2.6 million. The median age will climb from 43 to 52. This means that by 2041, around one in three will be classified as elderly, up from the current ratio of one in seven, and one in eight people will be aged 80 and over.

This demographic shift has already started. In the next 10 years the elderly population will rise by more than 50 percent, while the labor force will start shrinking around 2018. The low marriage rate and low birth rate have completely diminished the demographic dividend Hong Kong enjoyed in the past. Government statistics show that progressively fewer people of working-age will be available to support the elderly people aged 65 and over. The numbers are 10.3:1 in 1981; 5.3:1 in 2011; 4.9:1 in 2013; 3.4:1 in 2021; 2.2:1 in 2031 and 1.8:1 in 2041 (excluding foreign domestic helpers).

As today's parents grow older, their dependent adult children will also enter middle or old age, but will have insufficient income to support themselves and their parents. The problem of the interdependency between young and elderly people will present a great challenge to society in future. In August, the SAR's predicted GDP growth for 2014 was 2.7 percent. That forecast has now been lowered to 2.2 percent due to the "Occupy Central" campaign and other disruptions. If our government does not take action to tackle the issue of the ageing population now, the growth rate will become still lower. It will eventually turn into a zero or negative growth rate.

The projected average life expectancy for a Hong Kong female in 2014 is 85.6 years, and 82 years for a male. A quick and easy way of preventing the declining labor force would be to raise the retirement age to at least 65, and possibly 70. This would only be a temporary solution, but is an attractive one since it would immediately alleviate the shortage of experienced workers, managers, and corporate and government leaders. It would also reduce welfare payments, keep more people on the tax roll, balance the government's budget and increase GDP. Some countries are even considering eliminating the retirement age altogether and simply requiring seniors to pass certain medical tests, while others have already moved far ahead in this area. For example, mandatory retirement is generally unlawful in the United States, except in certain industries and occupations that are regulated by law.

However our senior citizens cannot live and work forever. From 2041, the SAR's population will have declined to less than 7 million by the end of the 21st century - which is about the same as its population at the beginning of the century. The ultimate solution is to increase the birth rate or to take in selected immigrants (a subject which will not be addressed here) to avoid Hong Kong all but disappearing from history's radar screen in the not too distant future.

Today's Hong Kong parents deserve society's appreciation for rearing children to provide "human resources" for the future sustainability of our society. Incentives or a stable government endowment should be given to home-makers during the child-rearing years (until age 6). Also, subsidies for children's education expenses (until age 18) and subsequent free re-education/training programs for the parents to re-integrate into the work force are strongly recommended. The required human resources fund could be established and built up by raising income taxes from the wealthiest 20 percent of taxpayers and/or imposing capital gain taxes for real estate and stock sales.

Finally, we agree with the observation of Hong Kong University economics and finance professor, Richard Y.C. Wong: "the most important challenge Hong Kong is facing. It is not the political elections in 2017. It is not the saturation of our landfills. It is not Hong Kong Television losing its bid for a license. It is the serious population challenge that Hong Kong will have to live with for the rest of this century if best policies are not adopted soon and for a sustained period. Otherwise, inaction will mean Hong Kong's gradual demise as a world-class metropolitan center."

The author is an independent scholar and freelance writer. She is also the founder and president of the China-US Friendship Exchange, Inc.

(HK Edition 11/25/2014 page10)