Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University


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Will Demographic Change Slow China's Rise?

Journal Article

Authors
Karen Eggleston*, Jean C. Oi*, Scott Rozelle*, Andrew G. Walder*, Xueguang Zhou*, Ang Sun*

Published by
The Journal of Asian Studies, Vol. 72 no. 03, page(s) 505-518
11 June 2013


China's population of 1.34 billion is now 50 percent urban, over 13 percent above age 60, and with 118 boys born for every 100 girls. For such a large population at a relatively low level of per capita income, how will aging interact with substantial gender imbalance and rapid urbanization?

Will Demographic Change Slow China’s Rise? In the eponymous article recently published in the Journal of Asia Studies, five Stanford scholars of political science, sociology, and economics based at the Shorenstein Asia-Pacific Research Center — Karen Eggleston, Jean C. Oi, Scott Rozelle, Andrew Walder, and Xueguang Zhou, with a former postdoctoral fellow Ang Sun — discuss how the intertwined demographic changes pose an unprecedented challenge to social and economic governance, contributing to and magnifying the effects of a slower rate of economic growth.

The authors touch upon a wide range of topics of policy import:
· China must overhaul rural education quickly if it is going to avoid producing tens of millions of workers who will be marginalized in the nation's future high-wage, high-skill economy.
· Growth slowdowns are almost always productivity growth slowdowns. Many forces impinge on multi-factor productivity; the stability and predictability of markets and governance are lynchpins. Discontent with widening disparities in China could undermine this fundamental foundation of growth.
· Demographic change will fundamentally challenge the conventional governance structures in China. Efforts to impose a bureaucratic solution to the intertwined social challenges China faces will almost inevitably stoke tensions between the society and the state. In both urban and rural areas, expansion of the bureaucratic state may become the central target of popular contention.
· China's high savings rate is partly explained by low fertility and parents' need to save for their own old-age support. Initiation of rural pensions and significant expansion of health insurance coverage and are examples of the social policy responses that China has undertaken to prepare for “growing old before becoming rich.” But much remains to be done.
· China's increasing burden of chronic disease further exacerbates the growth-slowing potential of a more elderly population and its associated medical expenditure burden.
· Although reducing precautionary savings and increasing domestic consumption as an engine of economic growth are widely acknowledged goals for China's economy, a rapid decline in savings could also imperil China's future economic growth by jeopardizing the current basis of the financial system.
· Demographic change will shape almost every aspect of how China copes with a slowing rate of economic growth, and may play a decisive role in the future social stability of China, with spillover effects for the region and the rest of the world.
The research is one product of a 3-year project analyzing Asian demographic change which will conclude in 2014 with a conference and edited book on demographic change and urbanization in China, in comparative international perspective.