How to make active aging an integral part of economic growth in China

As the second-largest economy in the world in 2022, China faces at once the challenges and the opportunities brought about by the Fourth Industrial Revolution. It presents a case where the demographic challenges of an aging population and gender disparity may be fruitfully solved by the measured use of digital technology as the country continues its transition to a greener, data-driven new economy. Healthcare, labour reskilling and gender parity are three areas of focus for domestic policy.

To address the set of interlocked challenges that China faces, a vision of inclusive and sustainable growth that pays particular attention to the elderly and women should be set forth.

China is a rapidly graying country with those aged 60 or above reaching 267 million, or 18.9% of the total population, which may reach one-third before 2050. With a falling fertility rate and an early retirement age, existing welfare infrastructure will be increasingly under duress. Revamping the welfare system is critical for China to maintain its competitiveness and the wellbeing of its citizens. A solution to China's aging population is the upgrading of healthcare services to become better integrated, age-friendly and wellness-oriented. Importantly, welfare reform must work in tandem with social policy so as to make active aging an integral part of economic growth, linking health to wealth and common prosperity.

Closely related, labour reskilling must be a priority for the senior workforce and for those facing employment risk due to automation. Elderly workers in China face persistent barriers to employment, especially in the information technology industries. Reskilling not only enhances the employability of the senior workforce. It also improves the quality of labour force as a whole, which will better serve China’s economic restructuring and its continued move up the global value chain.

The challenge of China's aging population cannot be addressed without improving the wellbeing of women. Fertility rate must never be merely a target number, even as China’s birth rate reached a record low in 2021. Rather, it must reflect women’s willingness and ability to start families based on their free and informed choices. Attendant social policy and legal institutions must be implemented. Equal pay, fair entry and reentry into the workforce, freedom from harassment and access to legal recourse are among the essential components of that picture.

To achieve the vision outlined above, here are three courses of action that should be taken:

Upgrading the healthcare system involves two steps. First, healthcare should extend beyond treating physical sickness to include mental health, occupational health, full-cycle care and wellness. Consistent with China’s national strategy on active aging, healthcare services should incorporate key elements such as preventive care and the scientific use of traditional Chinese medicine (TCM). The pandemic notwithstanding, appropriate resources must also be allocated to research and treatment for non-communicable chronic diseases.

Second, the COVID-19 experience in China has demonstrated the power of digital technology in rapidly improving the quality and efficiency of healthcare. The same should be leveraged for healthcare, in general, to achieve the integration of medical data and services both vertically and horizontally across institutions of all tiers. Steps should also be taken toward achieving parity in medical resource distribution across regions.

Concurrent to healthcare upgrading, legal and institutional measures should be implemented to eliminate ageist discrimination in the workplace and to promote flexible, age-friendly work arrangements. Short-term reskilling programs, including those tailored for the digital economy, should be made more accessible to all including the senior workforce. Digital literacy should be as important for young adults as it is for senior citizens. Awareness campaigns and training modules on anti-ageism are also desirable for employers. As the “silver economy” accounts for a large and growing share, these measures will enhance the overall digital preparedness of the Chinese economy.

No population growth can be sustainably attained without ensuring affordable access to healthcare, childcare, education and employment opportunities for women. Closing the gender gap in China must be pursued from multiple directions, from medical infrastructure, to social and welfare policy, to employment law, to cultural norms.

Free or affordable childcare must be made accessible to all working women in China, for both public and private employers. Public awareness campaigns should advocate for a fair share of childcare and housework for male spouses and partners. In addition, fertility technology remains a vastly under-tapped industry in China due in large part to lagging legal provisions. It should be a top priority for lawmakers and policymakers to ensure that Chinese women have easy access to artificial reproductive therapies (ART) including egg-freezing services. Doing so will address a dire need among millions in China as it will spur a slew of business opportunities. Lessons from advanced economies where some employers provide ART subsidies for employees would be illuminating.

Members of the Global Future Council on China who contributed to the article:

Yuan Jiakai, Vice-President and Chief Representative, China, United Way Worldwide

Edward Tse, Founder and Chief Executive Officer, Gao Feng Advisory Company

Li Xin, Managing Director of Caixin Global, Caixin Media

Liu Qian, Managing Director, Greater China, The Economist Group

Kishore Mahbubani, Distinguished Fellow, Asia Research Institute, National University of Singapore

Xue Lan, Dean, Schwarzman College, Tsinghua University