China: Growing old before growing rich?

China's economic miracle has been accompanied by an astonishly rapid ageing of its population. But will China's rapidly ageing population threaten its economic prosperity?

It has been more than a decade since China officially became an ageing nation. Since then, the country's ageing process has only picked up speed.

Younger generations today face an unprecedented burden of care. Thanks to the One Child Policy, many families face what is known as the 4-2-1 phenomenon— the only child supports their two parents and four grandparents in retirement.

As a result, senior residences like this one in Beijing are getting increasingly popular. Some elderly people also say, they prefer to be independent.

Liu Shuzhen, a retiree, said, "I moved here about a year ago after I had a surgery. At first my daughter strongly opposed my decision of coming here, but she can't attend to me 24 hours a day, and I don't want to burden her too much. Besides, I like it here, I get to enjoy all these activities I never had a chance to do."

But these pensioners are the lucky ones. Few enjoy these kinds of surroundings and this quality of support.

According to UN figures, there are more than 180 million Chinese aged over 60, just over 13% of the population. That number will likely double in fewer than 20 years, when China will have more retirees than the entire population of the US.

Li Qiuyuan said, "Advances in healthcare and nutrition, combined with the one child policy, have led to a rapid aging of China's population. Experts say that China has become one of the few countries in the world in which the population has aged before it has gotten rich. Just as the rise of the Baby Boomers had placed an indelible mark on the U.S. economy, China's demographic shift to an older society will have a profound impact on the Chinese economy and investment opportunities in China. "

The rapid ageing society has led to some economic and social consequences. Many of those are the same as those experienced by other ageing nations, such as a huge fiscal deficit due to soaring pension expenses and increased medical costs.

There are also some consequences particular to China, probably the most important one being the rapid decline of the labour force. China's vast worker pool powered the explosive growth of its export-driven economy over the past decade. But now the lack of young workers has hit China's economy just when it needs to pay for the elderly.

Arie Hoekman, China Representative of UN Population Fund, said, "Many people fear the "time bomb" of growing population of elderly people, that is going to weigh heavily on the capacity of the economy to continue to grow, and therefore China is stuck in a situation where it will not eventually grow rich before it grows old. "

Experts say that aside from a proper pension system, what the country needs the most now is a way to increase the capacity for people to create wealth during their productive life cycle.

At the mean time, a positive attitude in dealing the population crisis matters a great deal.

Arie Hoekman said, "It doesn't necessarily have to be a burden to the society, as we have seen in many countries in the world, it 's actually the elderly people that's contributing to the younger generation even beyond their age of 70. That notion of aging and that notion of being old is changing, in the past 60 used to be old, but now (if you were) 60, you are not old. "

For China, the demographics pose a huge challenge requiring difficult and innovative decisions in terms of policies on social welfare funding, population control, employment and labour development.

In the future, old people are likely to work for longer with less time to relax and enjoy their hobbies. That means pensioners like Liu might need to adjust to a different way of life as China faces up to its demographic challenges.