China-Nepal Media Cooperation, February 27, 2024
Wang Dan
As China is busy preparing for the annual two sessions of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), some Western media have been enthusiastically hyping that the Chinese economy is collapsing. Is the Chinese economy going to fail? What opportunities have China’s growth brought to the world? China Economy from a Global Perspective is a 10-part series analyzing the above questions. The fifth essay focuses on China’s population growth. Wang Dan is chief economist at Hang Seng Bank China.
The population in the Chinese mainland, again, recorded negative growth in 2023. According to the National Bureau of Statistics, the total number of people in China dropped to 1.409 billion last year, with 15.4 percent of them being 65 years and older.
In some countries, such demographic transition is translated into a slower economic growth. Researchers have found that increase in the fraction of the population aged more than 60 years old decreased per capita GDP in the U.S. during 1980 to 2010, due to slower growth of both jobs and labor productivity.
Senior residents exercise with the help of a staff member at a social welfare center in Hanshou County of Changde City, central China’s Hunan Province, June 20, 2023. /Xinhua
Admittedly, the Chinese economy faces some challenges, but there are bright sides to an aging society in terms of the silver economy. The share of older adults’ total spending worldwide is rising, as they grow in numbers and wealth. In large developing countries where the growth is concentrated, the new cohort of seniors will have accumulated higher savings than their predecessors, so per-capita spending also increases.
In China, the power of the silver economy is particularly striking. This thriving market includes various offerings, such as assistive technologies, personal care products, and nutritional supplements. This is best exemplified by the strong performance of elderly care products in the 2023 “double 11” sales promotion, where the nutritional supplements and health care equipment sales have more than doubled compared to the previous year. China’s advantage in digital infrastructure has also laid a foundation for the thriving of digital products and services targeting senior citizens, such as telemedicine and fall detection systems at home.
A job fair in Jinhua City, east China’s Zhejiang Province, July 21, 2023. /Xinhua
To tap the potential of the silver economy, the Chinese government has also been committed to creating favorable conditions for advanced services such as home care for the elderly as well as professional nurses. For instance, the State Council has recently released a guideline to address the challenges of an aging population. The guideline specifies measures to expand the supply of eldercare products and services while fostering industries with the potential to improve welfare for an aging society.
It stressed the need to improve digital services targeting the older population. Old residential buildings will add facilities such as elevators and digital monitoring devices; more online and offline stores will be created to cater to the needs specifically for the elderly; low-cost meal programs will be extended to cover wider senior cities in both urban and rural areas. All these endeavors will help bolster the intrinsic impetus of the silver economy in China.
While China faces challenges, its demographic transition means a new market with high growth potential, providing long-lasting impetus for high-quality development.
Research analyst Xu Yuqian has contributed to this article.
