Population Ageing And China’s Economy

Abstract

In many countries, the number and proportion of elderly people is growing. Some countries can be called ageing now; others can be attributed to this category later. The relevance of the problem of ageing is indicated by the fact that the activities of almost all international organizations are aimed at researching a particular problem of ageing. When adopting the "Vienna International Plan of Action on Ageing", for the first time, the definition of "ageing" was given by the criterion of the share of 60 and 80-year-olds in the total population of the country. The first should be at least ten percent, the second - at least seven. The ageing problem of the population is especially acute for China because of the policy of birth control. The problem also lies in the fact that in China the population is aging faster than the gross domestic product is growing. It is noted that, despite the growth of both consumer spending and savings, their share in the country's gross domestic product is declining. For example, the share of final consumption is reduced from 5.9% in 2011 to 3.6 in 2014. This research assesses the impact of population ageing on a number of macroeconomic parameters, including a decrease in the share of final consumption in the gross domestic product; the instability of domestic demand for durable goods and innovative goods; labor shortage; an increase in the burden for the state budget. The research ends with proposals for improving the country's pension policy.