Asia’s changing demographics are expected to generate winners and losers across the region, with younger nations seen enjoying a demographic dividend while aging societies tackle the costs. Yet the future for East Asia’s ultra-aging societies might not be as bleak as feared, if policymakers can turn education, migration, and technology to their advantage.
China already has 200 million senior citizens, more than the European Union nations combined, with its working-aged population projected to fall by 170 million people over the next three decades.
Rapid aging is expected to hit GDP growth in China, Hong Kong, South Korea, and Thailand by 2020, and Singapore by 2025, well before China’s expected transition into high-income status in 2026 and Thailand after 2040, according to Standard Chartered.
Overall, Asian populations are expected to age at a faster pace than any other region in coming decades, with the elderly population projected to reach nearly 923 million by 2050, according to the Asian Development Bank.
Declining fertility, increased longevity, and falling mortality have combined to cause Asia’s rapid pace of aging, giving governments plenty of headaches.
“Institutional support is not yet in place to respond to the rapid rise in aging. Pension systems remain unsustainable despite recent policy reforms. China’s nationwide pension system may run a deficit as early as 2030; Thailand will likely run a deficit from 2041. By then, the pension systems in [South] Korea and Vietnam should also run small deficits,” Standard Chartered said…
Aging: Don’t Worry?
Yet not all economists see aging as a major negative for modern society. In a June 26 report by ANZ Research, chief economist Richard Yetsenga argued that aging demographics “may not necessarily lead to slower growth or secular stagnation… A range of factors have led to reduced trend economic growth in many economies over the past decade, but in our view demographics is one of the least worrying.”
Read more at The Diplomat.