Contemporary Issue in the Chinese Economy Essay

Contemporary Issue in the Chinese Economy - Essay Example This research will begin with the statement that based on the results of the 6th national census carried out in 2010, the Chinese population’s average growth rate between 2000 and 2010 was 0.57%. In the same year, the population of people aged 60 and above reached hit the 178 million mark, representing 13.26% of the whole population and up to 5.64% starting 1982. The population in the 0-14 age group, however, represented 16.6%, a 16.99% decline compared with 1982. Reports forecast that the population of people aged 65 and above will represent between 15 and 20% in 2027 and 2035 accordingly. With a growth in the number of the aging people and decline in that of the working-age population, China’s dependency ratio of population will keep increasing and reach the 0.5 mark or above in 2033. This is a worrying statistic considering that it was 0.38 just 4 years ago. Based on forecasts by the United Nations, the dependency ratio of China’s population will reach an extr emely high level of 0.8 by 2070, meaning that 4 working-age people will be compelled to support at least two aged adults and one child by that time. This change in the population structure makes the challenge of an aging population a significant one for the country to confront so that it can guarantee social and economic development in the future. The past experiences of Japan show that even in a nation with a high-income level, advanced technology, highly-skilled workforce and developed infrastructure, an aging population is still likely to cause an economic downturn and even stagnation. In 2011, Chinese aged 65 and above represented 9.1% of the total population, a scenario very identical to what Japan faced in 1990. However, China is to some degree confronted with a more serious problem than Japan because it is currently still far from qualifying as a developed country. The negative effect on economic growth caused by the aging population can be summarized this way: First, the cou ntry will lose the benefits of backwardness prematurely in its pursuit of developed countries. Secondly, the country will lose its edge when competing with developing nations that still have a demographic share. Finally, China is yet to enjoy the innovative rewards of a developed country. Consequently, its original competitive benefits are dwindling, which in turn will surely magnify the need for a reform of China’s economic growth system.