Extend demographic dividend

According to the National Bureau of Statistics, the number of people aged 60 and above reached 249 million in China in 2018, about 18 percent of its total population. Moreover, China's new labor force in cities has been decreasing since 2012, with a total reduction of more than 26 million people.

It seems to be a consensus among social circles that China's demographic dividend is gradually disappearing. Can China, based on its current economic development and demographic structure, take measures to extend its demographic dividend and turn the "demographic burden" into a demographic advantage?

In an economic sense, demographic dividend refers to a country's ability to enjoy various benefits in investment, consumption and other aspects brought about by a relatively high proportion of the young and middle-aged labor force in its development process. There is no doubt that such kind of demographic dividend has been one of the biggest contributors to China's long-term economic development.

However, the rapid decline of the birthrate in recent years means China is confronting the risk of exhausting its demographic dividend.

Thus, how to extend China's demographic dividend and maintain its momentum of high-speed economic and social development remains a strategic task to which it needs to attach great importance.

Experiences from developed countries show that prolonging the working life of the population and fully tapping the market for the elderly is a necessary option to cope with a waning demographic dividend. For example, Japan's labor force participation rate for people over 65 exceeded 20 percent in 2013 and reached 23.7 percent in 2018. In contrast, the average retirement age in China has long been less than 55 years old, which has not only caused a huge waste of labor, but also increased the social security burden.

The elderly market is an important area for consumption and investment. There is also a huge demand for investment in health, tourism and other service facilities related to the elderly, which, if better utilized, can attract the participation of more social capital besides government investment. The transformation of the "population burden" into "demographic dividend" as soon as possible could help to maintain sustainable economic and social development by not only effectively solving the labor shortage problem, but also stimulating investment and consumption and reducing the pressure on the social security system.

(China Daily 03/26/2019 page11)