Monday, August 08, 2016

CHINA - Largest Baby Boom Generation in the World

"The unprecedented aging crisis that's about to hit China" PBS NewsHour 8/1/2016

COMMENT:  I can see the obvious solution for the Communist Party leaders, increase the retirement age.  This temporarily cures both problems.


SUMMARY:  China has the largest Baby Boom generation in the world.  But now just years away from a mass retirement, that country is headed toward a severe workforce crisis and retirement cost cash crunch.  Due to the country's one-child policy from 1978 until 2015, the younger generation poised to take over is relatively small.  What's the solution?  Judy Woodruff reports in conjunction with the Atlantic.

JUDY WOODRUFF (NewsHour):  In Southeast Asia, tensions continue to simmer as China claims sovereignty over the South China Sea, a busy international trade route.

The United States and China have both beefed up their naval presence there, leading to fears of a military confrontation.  This is just one example of China flexing its military muscle in recent months, and it coincides with a slowdown in the nation's economy.

Writing in “The Atlantic” magazine, journalist Howard French sees a connection between the two, pointing out that, as China's population ages, the country faces a huge demographic problem that will affect all aspects of its economic and military aspirations.

HOWARD FRENCH, The Atlantic:  China has its own Baby Boom generation.  And China's baby boom generation, because of the size of China itself, is the world's largest baby boom generation.

JUDY WOODRUFF:  Howard French, a former Shanghai bureau chief for The New York Times, has written extensively about China, and he's photographed its people.

HOWARD FRENCH:  This baby boom generation in China will start to hit retirement age in the very next few years, let's say by the end of this decade.

And, at that moment, extraordinary numbers of Chinese people will exit the work force, and the Chinese work force, which has already begun to shrink, will shrink in a vastly accelerated way.  And so China's going to face huge retirement costs and Social Security costs, health care costs, related to this immense aging of the population.

JUDY WOODRUFF:  What are the implications for China as a country and for the Chinese economy?

HOWARD FRENCH:  China will have the biggest aging crisis that the world has ever seen over the next generation, and this happens at a time when Chinese ambitions, geopolitically speaking, are expanding.

And at some point, these two phenomena will collide, and very tough decisions will have to be made about guns vs. canes.  In other words, how much can we afford to invest in our geopolitical ambitions, vs. how much must we invest in terms of supporting our population?

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