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Opinion / China Watch

A shortage of cheap labor looms
(The New York Times)
Updated: 2006-06-30 15:14

http://www.nytimes.com/2006/06/30/world/asia/30aging.html?pagewanted=1&ei=5094&en=92530c7ed24b728e&hp&ex=1151726400&partner=homepage

Shanghai is rightfully known as a fast-moving, hypermodern city - full of youth and vigor. But that obscures a less well-known fact: Shanghai has the oldest population in China, and it is getting older in a hurry.

The courtyard of the Minsheng Nursing Home. Residents pay the equivalent of US$100 a month to live there.


Residents playing mah-jongg in the Minsheng Nursing Home in northern Shanghai. Founded in 1998, it has 350 beds, which are now 95 percent occupied. The city is in the forefront of a nationwide aging trend. [The New York Times]

Twenty percent of this city's people are at least 60, the common retirement age for men in China, and retirees are easily the fastest growing segment of the population, with 100,000 new seniors added to the rolls each year, according to a study by the Shanghai Academy of Social Sciences. From 2010 to 2020, the number of people 60 or older is projected to grow by 170,000 a year.

By 2020 about a third of Shanghai's population, currently 13.6 million, will consist of people over the age of 59, remaking the city's social fabric and placing huge new strains on its economy and finances.

The changes go far beyond Shanghai, however. Experts say the rapidly graying city is leading one of the greatest demographic changes in history, one with profound implications for the entire country.

The world's most populous nation, which has built its economic strength on seemingly endless supplies of cheap labor, China may soon face manpower shortages. An aging population also poses difficult political issues for the government, which first encouraged a population explosion in the 1950's and then reversed course and introduced the so-called one-child policy a few years after the death of Mao in 1976.

That measure has spared the country an estimated 390 million births but may ultimately prove to be another monumental demographic mistake. With China's breathtaking rise toward affluence, most people live longer and have fewer children, mirroring trends seen around the world.

Those trends and the extraordinarily low birth rate have combined to create a stark imbalance between young and old. That threatens the nation's rickety pension system, which already runs large deficits even with the 4-to-1 ratio of workers to retirees that it was designed for.

Demographers also expect strains on the household registration system, which restricts internal migration. The system prevents young workers from migrating to urban areas to relieve labor shortages, but officials fear that abolishing it could release a flood of humanity that would swamp the cities.


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