The Declining Birthrate And The Aging Population In The East Asian Region: From The 13th Conference

On The Aging Population In East Asia Region The Declining Birthrate and the Aging Population in the East Asian Region: from the 13th Conference on the Aging Population in East Asia Region Mari Tsuruwaka Advanced Research Center for Human Sciences, Waseda University The 13th Conference on the Aging Population in East Asia Region was held for two days, October 9 th -10th, 2006, in Seoul and Daegu, Korea. Experts from Japan, China, Korea, and Taiwan assembled to present reports on the present state of the declining birthrate and the aging population, including the daily lifestyle of the elderly in the respective regions. The data presented by experts from each region on the declining birthrate and the aging population are given in Tables 1 to 4. Table 1 show that the ratio of the elderly aged 65 and over accounted for over 20 % of the total population in Japan. In other regions as well, there is a rapid progress of the aging society, following the case of Japan. In China, Shanghai shows a particularly high ratio of 14.97 % (2005), already entering the stage of an aged society. Table 3 gives an estimation of the future population of the elderly aged 65 and over in each region. In 2005, the ratio of the elderly aged 65 and over was 20.1 % in Japan, 9.1 % in Korea, 9.7% in Taiwan, and 7.6 % in China. The estimation for the year 2050, shows that the ratios will be 38.9 % in Japan, 37.3 % in Korea, 36.7% in Taiwan, and 23.6 % (according to the estimate of the U.N.) in China. Particularly, the ratios of the elderly aged 65 and over in Korea and Taiwan are expected to progress at an amazing speed to surpass the ratio of Japan. The extension of the average life expectancy associated with the low mortality rate and the declining birthrate may be accounted as factors for a further aging population. Table 2 shows total fertility rateTFRwhich is 1.25 in Japan, 1.08 in Korea, and 1.12 in Taiwan. Recently, a further decline in the birthrate is more evident in Korea and Taiwan than Japan. In regard to the average life expectancy given in Table 4, the figures for Japan and Shanghai show a slight decrease in the year 2005. It has been indicated that it may be due to the effect of the influenza that spread widely over the regions at the time. At the present Conference of the experts, it was revealed that the trend of the declining birthrate and aging population in the East Asian region will be further accelerated, following the footsteps of Japan which has already entered a severe aged society. The lifestyle and the way of thinking of the elderly in the various regions are largely influenced by the active daily life, culture, customs of East Asia, with a common ground in the relationship with the family and grandchildren and a life worth living. With a focus on the Asian region, undergoing remarkable development and changes, further comparative research that may contribute to the coexistence and further development of the region will be desirable. The research may be carried out in various fields,

including nursing care services, life worth living, participation in community activities, and the advocacy of the rights of the elderly in the respective regions. to Tables Korea to Become Most Aged Society in OECD in 2050 By Staff Lee Hyo-sik Reporter

South Korea will become the most aged society among advanced economies in 2050, with nearly four out of every 10 Koreans being aged 65 or over due to low birthrates and the rapidly aging population. The nation's population is expected to begin declining from 2018 and by 2050, there will be 6.41 million fewer people in the country than now. According to the National Statistical Office (NSO) Friday, people over 65 years of age will account for 38.2 percent of Korea's population in 2050, making it the most aged society among the 30 member economies of the Organization for Economic Cooperation and Development (OECD). The nation currently ranks 27th in the population-aging index among the OECD countries, with 11 percent of its population aged 65 or older. Japan tops the list with 22.6 percent, followed by Germany with 20.5 percent and Italy with 20.4 percent. But Asia's fourth largest economy is projected outpace Japan (37.8 percent), Italy (33.3 percent) and Germany (32.5 percent) by 2050. Korea's median age will increase to 56.7 years then from the current 37.3 years, with the average Korean expected to live for 79.1 years, higher than the world average of 67.6 years. With more senior citizens and fewer babies here, workers aged 15-64 will have to support more elderly. Currently, every 100 Korean workers provide for 15 senior citizens, lower than the average 24 among OECD member countries. But 100 employees will have to look after 72 in 2050, much higher than the predicted OECD average of 45.

With Korean women having fewer babies, the country's population is projected to shrink by 13.1 percent, or 6.41 million, to 42.34 million in 2050 from this year. Currently, it is the 26th most populous nation in the world but its ranking is expected to fall to 46th in 40 years time. Among 35 countries projected to lose citizens during the 2009 to 2050 period, Korea's population will decline at the fourth steepest pace. Japan's population is forecast to drop 20.1 percent over the next 40 years, followed by Poland with 15.9 percent and Germany, 14.2 percent. Korea's population decrease is largely attributable to the world's lowest birthrate. The nation's birthrate, or the average number of babies expected per woman aged 1549, is projected to stand at 1.13 during the 2005 to 2010 period, lower than the OECD average of 1.64. ``Korea's rapid population aging, paired with a low birthrate, is weakening its economic vitality. It will dampen domestic consumption and create a labor shortage, leading to an era of low economic growth, unless the nation takes drastic steps to raise the birthrate, improve the use of public resources and encourage more women and senior citizens to participate in economic activities,'' an NSO official said. He said the government should nurture new growth engines, shift the nation's economic structure to be more efficient and less labor-intensive, and bring in more foreign workers to achieve sustainable expansion, adding the public and private sectors should join hands to increase the birthrate and encourage more women to participate in the economy. Meanwhile, the world population will likely reach 9.15 billion in 2050 from the current 6.83 billion. India is expected to outpace China and become the world's most populous nation, with its population jumping to 1.61 billion from 1.12 billion. leehs@koreatimes.co.kr

Opportunity of Korea's aging population By Laurent Rotival

In Korea, we are not alone in grappling with the implications of a rapidly aging society. Century life spans are becoming increasingly common and the aspiration for a continued quality of life is equally strong. We are facing a promising new chapter in our evolution where the outlook to multiple additional decades of meaningful and productive life beyond our sixties is a reality. Recently, the Royal Bank of Scotland (RBS) released a report stating that Koreas progress toward an aged society is the fastest in the world. They predicted that, by 2045, the average labor age in Korea would reach 50 years, establishing Korea as having the oldest workforce in the world ahead of Japan. Furthermore, the outlook for an extended lifespan, compounded with one of the worlds lowest birth rates, sets the aging of the overall population at a pace to become a so-called super aged society like Japan by 2025. Unaddressed, this will lead to significant future challenges for individuals, families, communities and the nation. On the health front, with longevity, the probability of chronic diseases increases significantly with particular incidences of cardiovascular, cancer and neurological complications. Economically, this demographic shift leads to national insurance funding challenges mainly driven by labor shortages derived from an increased imbalance in the young-to-elderly worker dependency ratio. Fortunately, this isn't unprecedented and Korea's neighbor is a good place to look to for lessons learned and the best practices. Japan has been facing similar demographic challenges and they have shown that, in addition to developing an infrastructure to care for elders, they have capitalized on the economic opportunity to serve the lifestyle needs of this growing segment. Japans elderly have become less dependent on care and many elderly people continue to lead active lives with only minor assistance. With these trends, the market opportunity in Japan is in helping seniors live the lives they want to lead, not simply catering for those with severe disabilities. Capitalizing on this market opportunity, however, requires 4

innovation across many sectors. One compelling example has been GE Healthcare Japan's Silver to Gold initiative. Its objective is to build a healthcare infrastructure specifically optimized for Japan's super-aged society. This, under the umbrella of GEs healthymagination initiative, is about delivering better health for more people. Silver to Gold is specifically about focusing on the most needed areas of care for aging populations. To name a few, liver, MSK, and Alzheimer diseases and providing integrated solutions across medical imaging, information technology, life sciences and diagnostic enhancing technologies for healthcare professionals, clinics and hospitals. The market opportunities in Japan are significant and the impact across the quality of care, its economic value and access are very exciting. In Korea, we have tailored this healthymagination strategy, under the banner of Connected Corea. Our commitment is to mobilize our resources and talents to solve the challenges presented by the accelerated aging of our Korean society. At the patient level, based on the predominant diseases experienced in Korea, our top priorities are liver, breast, Alzheimer and cardiovascular diseases. Like Japan, aging shouldnt be a problem but an opportunity, and we are confident that, Korea, with its talent, vision, and globally respected clinical institutions is ideally suited to lead the way nationally and globally. In close collaboration with our Korean partners across clinical, government, insurance and technology stakeholders, our goal is to help deliver a more sustainable Korean healthcare delivery system that maintains its cost efficiency while continuing to deliver world-class quality and access. We are in this together and we look forward to continuing to be a key partner in transforming our societies so that we can lead longer, fuller and more meaningful lives while turning the silver industry to gold. Laurent Rotival is President & CEO of GE Healthcare Korea.

Chinas Achilles heel A comparison with America reveals a deep flaw in Chinas model of growth Apr 21st 2012 | from the print edition

LIKE the hero of The Iliad, China can seem invincible. In 2010 it overtook America in terms of manufactured output, energy use and car sales. Its military spending has been growing in nominal terms by an average of 16% each year for the past 20 years. According to the IMF, China will overtake America as the world's largest economy (at purchasing-power parity) in 2017. But when Thetis, Achilles's mother, dipped her baby in the river Styx to give him the gift of invulnerability, she had to hold him somewhere. Alongside the other many problems it faces, China too has its deadly point of unseen weakness: demography.

In this section Chinas Achilles heel New homes for the old Reprints Over the past 30 years, China's total fertility ratethe number of children a woman can expect to have during her lifetimehas fallen from 2.6, well above the rate needed to hold a population steady, to 1.56, well below that rate (see table). Because very low fertility can become self-reinforcing, with children of one-child families wanting only one child themselves, China now probably faces a long period of ultra-low fertility, regardless of what happens to its one-child policy. The government has made small adjustments to the policy (notably by allowing an only child who is married to another only child to have more than one child) and may adapt it further. But for now it is firmly in place, and very low fertility rates still prevail, especially in the richest parts of the country. Shanghai reported fertility of just 0.6 in 2010probably the lowest level anywhere in the world. According to the UN's population division, the nationwide fertility rate will continue to decline, reaching 1.51 in 2015-20. In contrast, America's fertility rate is 2.08 and rising. The difference between 1.56 and 2.08 does not sound large. But over the long term it has a huge impact on society. Between now and 2050 China's population will fall slightly, from 1.34 billion in 2010 to just under 1.3 billion in 2050. This assumes that fertility starts to recover. If it stays low, the population will dip below 1 billion by 2060. In contrast, America's population is set to rise by 30% in the next 40 years. China will hit its peak population in 2026. No one knows when America will hit its population peak.

The differences between the two countries are even more striking if you look at their average ages. In 1980 China's median (the age at which half the population is younger, half older) was 22. That is characteristic of a young developing country. It is now 34.5, more like a rich country and not very different from America's, which is 37. But China is ageing at an unprecedented pace. Because fewer children are being born as larger generations of adults are getting older, its median age will rise to 49 by 2050, nearly nine years more than America at that point. Some cities will be older still. The Shanghai Population and Family Planning Committee says that more than a third of the city's population will be over 60 by 2020. This trend will have profound financial and social consequences. Most obviously, it means China will have a bulge of pensioners before it has developed the means of looking after them. Unlike the rest of the developed world, China will grow old before it gets rich. Currently, 8.2% of China's total population is over 65. The equivalent figure in America is 13%. By 2050, China's share will be 26%, higher than in America. In the traditional Chinese family, children, especially sons, look after their parents (though this is now changingsee story on next page). But rapid ageing also means China faces what is called the 4-2-1 phenomenon: each only child is responsible for two parents and four grandparents. Even with high savings rates, it seems unlikely that the younger generation will be able or willing to afford such a burden. So most elderly Chinese will be obliged to rely heavily on social-security pensions. China set up a national pensions fund in 2000, but only about 365m people have a formal pension. And the system is in crisis. The country's unfunded pension liability is roughly 150% of GDP. Almost half the (separate) pension funds run by provinces are in the red, and local governments have sometimes reneged on payments. But that is only part of a wider problem. Between 2010 and 2050 China's workforce will shrink as a share of the population by 11 percentage points, from 72% to 61%a huge contraction, even allowing for the fact that the workforce share is exceptionally large now. That means China's old-age dependency ratio (which compares the number of people over 65 with those aged 15 to 64) will soar. At the moment the ratio is 11roughly half America's level of 20. But by 2050, China's old-age ratio will have risen fourfold to 42, surpassing America's. Even more strikingly, by 2050, the number of people coming towards the end of their working lives (ie, those in their 50s) will have risen by more than 10%. The number of those just setting out (those in their early 20s, who are usually the best educated and most productive members of society) will have halved. Help wanted The shift spells the end of China as the world's factory. The apparently endless stream of cheap labour is starting to run dry. Despite pools of underemployed 8

country-dwellers, China already faces shortages of manual workers. As the workforce starts to shrink after 2013, these problems will worsen. Sarah Harper of the Oxford Institute of Population Ageing points out that China has mapped out the age structure of its jobs, and knows for each occupation when the skills shortage will hit. It is likely to try to offset the impact by looking for workers abroad. Manpower, a business-recruitment firm, says that by 2030 China will be importing workers from outside, rather than exporting them. Large-scale immigration poses problems of its own. America is one of the rare examples of a country that has managed to use mass immigration to build a skilled labour force. But America is an open, multi-ethnic society with a long history of immigration and strong legal and political institutions. China has none of these features. In the absence of predictable institutions, all areas of Chinese society have relied onguanxi, the web of connections that often has extended family relations at the centre. But what happens when there are fewer extended families? One result could be a move towards a more predictable legal system and (possibly) a more open political culture. And, as shifts in China's economy lead to lower growth, Chinese leaders will have to make difficult spending choices; they will have to decide whether to buy guns or walking sticks. China is not unique in facing these problems. All rich countries have rising pension costs. And China has some advantages in dealing with them, notably low tax rates (giving room for future increases) and low public expectations of welfare. Still, China is also unusual in two respects. It is much poorer than other ageing countries, and its demographic transition has been much more abrupt. It seems highly unlikely that China will be able to grow its way economically out of its population problems. Instead, those problems will weigh down its growth rateto say nothing of the immense social challenges they will bring. China's Achilles heel will not be fatal. But it will hobble the hero.