Grow Old and Prosper

[rffrydr]

I guess $12 soybeans isn't high enough.

Asian demographics

Published: July 31 2009 09:14 | Last updated: July 31 2009 12:27

When China tells its banks to lend, they do. Now Beijing wants its citizens to breed. China is mulling a partial roll-back of its one-child policy as concerns about its ageing workforce top yesteryear’s doom-laden Malthusian fears. Several other Asian governments also want their citizens to go forth and multiply.

In Japan, where the total fertility rate (TFR) is 1.37 children per women, well below replacement levels, increasing child care benefits has become a key issue in this month’s election campaigns. The inclination to breed is even lower in Korea and Hong Kong. The TFR there is currently running at just over one child per woman, according to the United Nations.

China’s one-child policy, although pervasive enough to create the so-called Little Emperor Syndrome, was never quite that. There is a list of exemptions, including ethnic minorities and spouses whose husbands are fisherman absent at sea for more than five years. In cities, officials often turned a blind eye on two-child families, or fines were paid instead. Indeed, the UN puts China’s TFR at 1.77 – higher than in Germany or Italy.

Still, moves by Shanghai to reverse course and actively promote two-child families among eligible couples marks an inflexion point. It implies an awareness, shared by neighbouring Japan and Korea, about the need to reduce the number of pensioners relative to taxpayers. For the moment China is enjoying a demographic sweet spot, as research house GaveKal notes. The country’s dependency ratio, the number of children and retirees relative to the working population, is around 40 per cent. But the UN forecasts this will rise to nearly 60 per cent by 2040, comparable to European and US levels.

The big question is whether China will get rich before it gets old. So far Beijing has been able to boost economic productivity via the mass migration of farmers to urban coastal areas. That cannot continue indefinitely. Making more babies would certainly help. Whether officials can persuade Shanghai’s women to lie back and think of China is another matter.
_________________
Today is the Tomorrow you worried about Yesterday!