“Sleep well, eat well, that’s all that matters to an old man,” says Xiao, 75, a resident of Rudong, located in Jiangsu province, China. Cheerful, the lady shares a room with a couple in their 80s in a former primary school now converted into an elderly home – which perfectly illustrates the chinese demographic crisis.
A sign on the wall of the Rudong Binshan building warns visitors that rice balls pose a choking hazard for their older relatives. For Xiao, the best thing about this place is that “we don’t have to cook”.
In the late 1960s, Rudong’s population was so large that the county was the first county where the one child policy. Today, almost 60 years later, it is the oldest region in the country: nearly 39% of its population is aged 60 or older — more than double the national average of 18.7%.
In view of this, schools were closed, and farms have difficulty finding labor, while the elderly population survives on pensions —with values considered meager in many cases.
Rudong’s predicament offers a glimpse of the demographic challenge ahead in China which, in large scale and speed, promises to far surpass similar crises in other countries such as Japan and Italy.
Last month, the India has overtaken China as the world’s most populous country, according to a UN study. This happened after the Chinese population has shrunk in the past yearfor the first time since the 1960s.
For Beijing, the demographic crisis will require painful reforms to a growth model that has made China the world’s second-largest economy, including shifting spending on infrastructure and real estate to pensions, healthcare and an effort to find younger workers for factories. The country will also have to address acute inequality in the pension system, which means that many urban residents receive much higher benefits than most migrant workers and rural residents.
“Population development is a vital issue,” leader Xi Jinping told senior officials this month. He also highlighted the party’s new slogan, “high-quality development of the population”, which emphasizes the need for better childcare and education and reducing the burden of raising families.
“What you see in Rudong is just the beginning,” says Huang Wenzheng, a senior fellow at the Center for China and Globalization think tank in Beijing. “Rudong could end up becoming a ghost town.”
When the one-child policy was introduced, people hoped that the measure would help reduce household poverty in Rudong’s populated villages by reducing the number of mouths to be fed.
“Nobody had enough to eat in the 1960s,” said Wu Aiping, an entrepreneur who runs another nursing home in Rudong, Huayuantouju Home for the Elderly.
Over time, the one-child policy took root and families progressively shrank. In the 1980s, as China’s economy boomed, young people began to leave Rudong in search of more profitable work in Shanghai and other eastern cities.
In 2016, with falling fertility rates, the China finally abandoned the one-child policy. But it was too late for Rudong. In the decade ending 2020, the county’s population declined by nearly 12%, dropping to 880,000 people. In 2022, its income of 43,645 yuan per capita ($10,000), while high compared to the rest of the country, lost more than 12% to the rest of prosperous Jiangsu province.
The elderly are even poorer. Many elderly people in Rudong say that their monthly pension is 300 yuan ($100) or less. Although they say that the amount is insufficient, it still exceeds the value that, according to the IMF, represented the average paid in the Chinese countryside: 170 yuan (R$ 120). That amount is below the absolute poverty line in rural areas set by the regime: 192 yuan per month (R$135).
Due to the high cost of living in the country, most elderly people in rural areas are reluctant to ask their descendants for money. As a result of the one-child policy, some young couples have to care for grandparents and parents in addition to their own children.
Faced with this, many elderly people do anything possible to guarantee their livelihood. On a minuscule state pension, a 77-year-old woman sells incense outside the 1,200-year-old Guoqing Temple. She says she works because she doesn’t want to be a burden on her son.
A 64-year-old tricycle driver said he was too old to be a carpenter in his former trade. “Nobody wants me anymore,” he explains.
You can still see elderly farmers working in the fields. “Work is good for these old people,” says the supervisor of a group of workers in their 70s who were weeding a field sown with onions, earning 8 yuan (R$5.50) an hour. “If they stay at home, they get sick quickly.”
Many employers, as well as city officials, are hoping to lure younger workers into what the regime calls the “dynamic decade” of Rudong. However, young people are in short supply. Given this, incentives are offered to heat up the economy, from higher wages to subsidized housing.
A sign at the job center advertises jobs at one of the factories in Rudong, operated by Irish food, beverage and pharmaceuticals group Kerry. The advertisement says that young male workers can apply for jobs as a machine operator with a monthly salary of 6,500 yuan or more. Meanwhile, unskilled workers aged 40 to 55 are offered a remuneration of 5,800 yuan.
At a new housing development in the city, realtors said the local administration offers discounts to buyers who have doctorates, master’s degrees or are families with two children. These local incentives are replicated at the national level.
A government agency has launched projects in 20 cities to build “a new era of marital culture” that aims to encourage couples to have children. In an effort to reduce the cost of marriage, Beijing has announced initiatives to crack down on dowry requirements and extravagant weddings.
Some cities are offering cash prizes to couples who have a third child; others are extending maternity and paternity leave. Many are subsidizing fertility-assisting treatments such as IVF.
But analysts question whether these piecemeal initiatives will be enough to protect the Chinese economy against a demographic decline, which some forecasts could reduce GDP growth by a percentage point a year through 2035.
If things continue as they are, says Bert Hofman, director of the East Asian Institute at the National University of Singapore, by the end of the century China will have just one active worker for every retiree, up from four today.
According to Hofman, to combat this trend, Beijing needs to gradually encourage people to work beyond the current minimum retirement age — 50 for women and 60 for men — and encourage further migration of the still large rural population to more productive urban jobs. .
Policymakers also need to expand private pensions and improve the health sector. “A comprehensive reform package is needed that includes all of these,” Hofman opines.
Until these reforms are undertaken, semi-rural counties like Rudong will continue to struggle to care for their elderly.
Entrepreneur Wu said her Huayuantouju Home for the Elderly continues to operate because it attracts residents from nearby cities such as Shanghai and Nanjing, which receive higher pensions.
Taking visitors around the home, whose modest rooms are decorated with portraits of Xi Jinping and first lady Peng Liyuan, Wu said he wants to build an extension on neighboring land. “Demand is not lacking”, he comments. But even his business is struggling to operate due to a shortage of assistants, a result of declining populations. “Nowadays, helping the elderly to take a shower is too low a job for young people.”
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