Yao Yang: Put Aging in Perspective

May 13-2021   

The outcome of the 7th national population census indicates that China’s population has maintained slow growth over the last ten years; meanwhile, aging has continued to gain momentum and is likely to exert pressure on the balanced population growth over the long term. Despite so, Prof. Yao Yang, Dean of the NSD, suggests putting the aging issue in a rational perspective.

Compared to ten years ago, the population aged 60 and above has increased its share of the national total by 5.44%, while that aged 15-59 has contracted by 6.79%.

The aggravation of the aging issue has direct effects on China’s productive activities, but too much worry is not warranted, says Prof. Yao in a media interview. In fact, the negative impact of aging might have been overblown, if the mitigating power of three factors are taken into consideration: automation and AI, education, as well as urbanization.

Over the next 30 years, the rapid development of automation and AI will more than substitute for the decline in labor force resulting from aging, according to calculations by Prof. Yao. In the meantime, the youngsters are much better educated than the retiring generation. Those aged 20-30 have twice the productivity of the people going into retirement.

Moreover, urbanization will compensate for decreasing consumption caused by an aging population. The census shows that 63.89% of the population live in cities and towns; a further 15% will become urbanites over the next 15 years and drive up consumption, says Prof. Yao.

The impact of aging will be most keenly felt in pension and medicare, says Prof. Yao. To fend off the mounting challenges, he advises taking three immediate measures: speed up the transfer of state-owned assets into the social security system; quicken steps to raise retirement age; and reinforce national coordination of pension funds.