China's Demographic Shifts:
The Shape of Things to Come
Adele Hayutin, Ph.D.
Director, Global Aging Program
Stanford Center on Longevity
October 24, 2008
ahayutin@stanford.edu
http://longevity.stanford.edu/myworld
80
40
0
40
80 80
1950
554.8 million
©2008 Stanford Center on Longevity
40
0
40
1975
927.8 million
80 80
40
0
40
2005
1.313 billion
80 80
40
0
40
2030
1.458 billion
80 80
40
0
40
2050
1.409 billion
80
Contents
This briefing provides an overview of population aging in China and illustrates key
workforce implications. The document is organized as follows:
 Summary
 Demographic Drivers
 Fertility
 Life Expectancy
 Population Age Structure
 Speed of Aging
 % 65+
 Median Age
 Changing Age Mix
 Population Growth by Age Bracket
 Workforce Implications
 Workforce Growth by Age Bracket
 Economically Active Population
 Demographic Dividend
 Worker-to-Retiree Ratios
 Urbanization
Appendix A: Alternative Fertility Scenarios
Appendix B: Comparative Reference—India, South Korea, Japan, and U.S.
Note on Sources:
This briefing relies on the United Nations 2006 medium variant forecast, unless otherwise
noted.
Page 2
Summary
China’s fertility declines and increasing longevity will produce
an age structure top heavy with old people.
80
40
0
40
80 80
40
0
40
80 80
40
0
40
80 80
40
0
40
80 80
40
1
0
40
1950
1975
2005
2030
2050
554.8 million
4% 65+
927.8 million
4% 65+
1.313 billion
8% 65+
1.458 billion
16% 65+
1.409 billion
24% 65+
80
Population in millions by five-year age bracket; males on left, females on right
Source: United Nations 2006 medium variant forecast

China is rapidly aging; by 2050 half the population with be over 45 and a quarter of the population
will be age 65 or older. Because of its early and steep fertility decline, China will age sooner and
faster than other developing countries. China's age structure will soon be top heavy with old
people.

The absolute number of children and young workers will decline sharply. Without a dramatic
increase in fertility, population gains will occur only in the older age brackets.

The workforce will rapidly age as the number of young workers declines; total working-age
population will peak in 2015 at about 1 billion, and then fall 13% by 2050. Total population is
projected to shrink by 2030.

Over the past several decades China has benefited from the demographic dividend of an increased
number and share of working-age people coupled with high productivity growth. China has a few
more years to capitalize on this demographic dividend. After that, the projected decline in workingage population will pose significant challenges for China’s sustained growth: absent sustained
productivity gains and labor market changes, China's economic engine could stall. Thus, we can
expect greater pressure for productivity gains as well as changes in labor market structure.

A further demographic challenge will be the doubling of the urban population to 1 billion by 2050;
by then, 73% of China's 1.4 billion people will live in urban areas.
Page 3
Demographic Drivers
China’s fertility rate plunged in the 1970s even before the one-child
policy; the rate is projected to remain below replacement level.
2
Fertility (Births per Woman)
7
6
5
4
Replacement rate = 2.1
3
2
1.7
1
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast
China enjoyed an especially sharp increase in longevity during
the late 1960s.
3
Life Expectancy at Birth, in years
80
73.7 Women
70
70.5 Men
60
50
40
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast

Two major factors determine population aging. First is declining fertility, which reduces the
number of children. Second is increasing longevity which increases the number of old people.

Fertility in the developing world has dropped by half since about 1970, from 6.0 to 2.9 births per
woman. China experienced one of the world's fastest declines in fertility, dropping from 6 births per
woman in 1955 to less than 2 in the early 1990s.

While longevity gains have occurred globally, China enjoyed an especially steep increase in life
expectancy —from 50 to 60—during the late 1960s. Life expectancy reached 72 in 2005 with
continued increases forecast over the next half century.
Page 4
Population Age Structure
China is rapidly aging; by 2050 a quarter of the population
will be age 65 and older; half the population will be over 45.
4
Median Age
32.5
41.3
45.0
65 and Over
15 to 64
Under 15
80 60 40 20
0
20 40 60 80
2005
1.313 billion
8% 65+
80 60 40 20
0
20 40 60 80
80 60 40 20
2030
1.458 billion
16% 65+
0
20 40 60 80
2050
1.409 billion
24% 65+
Population in millions by five-year age bracket; males on left, females on right
Source: United Nations 2006 medium variant forecast

This series of histograms shows how China changes from a society with a broad base of young
people to an aging society top heavy with old people.

Each histogram above shows the population in five-year age brackets, with children on the bottom
and old people at the top; males are on the left and females on the right.

The impact of the 1970s fertility decline and the 1979 one-child policy can be seen at the bottom of
the 2005 histogram: as fewer children are born, the histogram’s base narrows.

With a 2005 fertility rate of only 1.7—well below the 2.1 replacement rate—China already has a
decreasing number of children as shown by the narrowing of the histogram’s base.

At the same time, the top of the histogram widens as life expectancy increases and more people live
longer, moving into the upper age brackets.

In 1950, when China had a pyramid shaped age structure with a broad base of young people, only
4% of the population was 65 or over, but by 2005, the share of 65+ had increased to 8%. The share
is projected to increase to 16% by 2030, slightly higher than the current U.S. share, and much
higher than the projections for most other developing countries.
Page 5
Speed of Aging
Due to its steep fertility declines, China’s median age has
increased sharply, from 20 in 1970 to 33 in 2005.
5
Median Age, in years
60
55
Japan
50
South
Korea
45
China
40
US
35
India
30
25
20
15
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast
6
China is aging faster than the US and India.
Percent 65+
40%
35%
Japan
30%
South
Korea
25%
China
20%
US
15%
10%
India
5%
0%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast

The simultaneous increase in life expectancy and a precipitous drop in fertility contributed to the
sharp increase in China’s median age beginning in 1970. At that time, half the population was
younger than 20. By 2030 half the population will be older than 41, compared with 39 for the US.

The combination of a sharp fertility decline and a steep longevity gain results in an “age wave”
beginning in 2015, as the share of the population 65+ begins a steep increase. By midcentury,
almost a quarter of the population will be age 65 and over.
Page 6
Changing Age Mix
7
China’s workforce will peak around 2015.
Age Mix (millions)
Total Population (millions)
1,500
1,000
900
800
1,250
65+
15-64
700
1,000
600
500
750
400
< 15+
500
300
200
250
65+
100
0-14
0
1950
15-64
0
1975
2000
2025
2050
1950
1975
2000
2025
2050
Source: United Nations 2006 medium variant forecast

This age mix chart shows the size and growth of the three age major groups.

The population aged 65+ has been steadily increasing and will more than triple, growing from 100
million in 2005 to over 300 million by 2050.

Due to the steep fertility decline, the number of children has been declining since 1975.

This steep decline in number of children will in turn decrease the size of the working-age
population. Working-age population is projected to peak in 2015, then fall 14% by 2050.

Total population is projected to start declining in 2030.
Page 7
Changing Age Mix
The number of children and young workers will decline sharply.
Population gains will occur only in the older age brackets.
8
Change in Population by 10-Year Age Bracket, in millions
2005-30
2030-50
+145 m
(11%)
-50 m
(-4%)
+204 m
(+142%)
+90 m
(26%)
40 to 59
+84 m
(+26%)
-63m
(-15%)
20 to 39
-81 m
(-18%)
-26m
(-7%)
Under 20
-61 m
(-15%)
-50 m
(-15%)
60 and Over
-100
-50
0
50
100
150
-100
-50
0
50
100
Source: United Nations 2006 medium variant forecast

These “change histograms” show the change in population by age bracket. They represent the
change between the histograms shown in Chart 4. The graph on the left shows the change from
2005 to 2030, and the one on the right shows the change from 2030 to 2050.

From 2005 to 2030, the total population is expected to grow by 145 million, an 11% increase. All of
the gain occurs in the older age brackets, while population in the younger age groups will shrink.
Over the coming 25 years, the number of young people under 20 will shrink by 15% and the
number of younger working-age people will shrink by 18%.

This general pattern continues over the period from 2030 to 2050 and moves up the age histogram:
All of the brackets from age 0 to 60 will lose people, while the age group 60 and above will have a
26% gain, adding 90 million people. The total population will decrease by 50 million.
Page 8
Workforce Implications: Workforce Growth by Age Bracket
The workforce will rapidly age as the number of young
workers declines.
9
Change in Working-Age Population, in millions
80
60
40
Older workers, age 40-64
20
0
-20
Younger workers, age 20-39
-40
-60
2000
-05
2005
-10
2010
-15
2015
-20
2020
-25
2025
-30
2030
-35
2035
-40
2040
-45
2045
-50
Source: United Nations 2006 medium variant forecast

The population in the younger working-age brackets, age 20-39, is projected to steadily decline
leading to a rapid aging of the remaining workforce.

As the population ages, the number of people in the older working-age bracket of 40-64 will
increase, but beginning in 2030, the size of that age group also begins to decline.
Page 9
Workforce Implications: Economically Active Population
The shift to older workers will continue: by 2020, older
workers will comprise over a third of the active labor force.
10
Economically Active Population, in millions
800
38%
28%
700
600
45-64
year olds
500 23%
400
300
20-44
year olds
200
100
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: ILO, Fifth Edition, 1980-2020
Labor force participation is lower for women, especially
after age 45.
11
2005 Economically Active, participation rate by age
100%
Men
80%
60%
Women
40%
20%
0%
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
65+
Source: ILO, Fifth Edition

The previous charts showed data for the number of "potential workers," the total population in the
working-age brackets. In reality, the "actual" number of workers is significantly less because not
everyone of working age participates in the labor force. The charts in this section show ILO
estimates of the "economically active" population.

Chart 10 shows that the shift to older workers will continue. By 2020, workers age 45 to 64 will
account for 38% of the labor force ages 20-64, up from 23% in 1980 and 28% in 2005. The share
will increase as the potential number of young workers continues to decline.

As shown in chart 11, labor force participation is lower for women than men at almost all ages, with
participation dropping off sharply at age 45. For men the drop in labor force participation occurs at
age 60. These patterns reflect the "official retirement ages" for those limited number of workers
who have retirement coverage. The ILO projects that these participation rates will remain relatively
steady through 2020.
Page 10
Workforce Implications: Economically Active Population
Increased labor force participation, especially among women
and older people, could boost the labor supply.
12
Total and Economically Active Population; % Economically Active
2005
Economically
Active
2020
65 and Over
94 million
women 45-64
outside the
labor force
59 million
women 45-64
outside the
labor force
45 to 64
20 to 44
88% 55%
87% 54%
96% 90%
96% 90%
Under 20
80
60
40
20
0
20
40
60
80
80
60
40
20
0
20
40
60
80
Population in millions by five-year age bracket; males on left, females on right;
ILO data for economically active population age 65+ is included in 65-69 bracket.
Source: ILO, Fifth edition, 1980-2020, and UN 2006 for population <15 and 65+

The double histogram in chart 12 illustrates the gap between the total population in each age
bracket and those who are actually economically active. The outer histogram is the total population
and the inner histogram reflects the size of the economically active population.

Labor force participation rates are high (96% for men and 90% for women) for the younger age
brackets. But for the older working-age brackets, 45 to 64, the participation rate falls to 88% for
men and just 55% for women. Thus, in 2005, 59 million women age 45-64 were outside the labor
force. By 2020, this number will be 94 million.

The double histogram illustrates the possibilities for increasing labor supply in the face of a
shrinking number of potential workers:


Increase the participation rate at each age (increase width of the light blue bars)

Extend the definition of working age (raise the height of the light blue area)
Most Chinese do not have retirement benefits and must rely on personal savings or family to
support them in old age. Pension coverage is largely limited to urban workers in state owned
enterprises where the official retirement age is 60 for men and 55 or below for women, ages that
were set when life expectancy was closer to 50. Given today's life expectancy, these "official
retirement ages," would result in about 19 years in retirement for men and 26 for women.
Page 11
Workforce Implications: Demographic Dividend
The fast-growing Asian economies benefitted from a “demographic
dividend” – a steep run-up in workers per dependent.
13
Ratio of Working-Age Population (15-64) to Dependent-Age Population (65+)
3.0
2.5
2.0
India
1.5
China
1.0
South
Korea
Japan
0.5
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast

A key determinant of a country's economic potential is growth in the relative size of its working-age
population, specifically, the size of its working-age population relative to its dependent population,
including children and retirees. The economic boost from an increase in the share of potentially
productive people has been called a "demographic dividend."

China has been enjoying a demographic dividend since around 1975. The increase in workers per
dependent will continue until around 2015, so China has only a few years left to capitalize on this
dividend. After that, the working age population begins to shrink while the older dependent
population increases.
Page 12
Workforce Implications: Worker-to Retiree Ratios
The steep decline in workers per retiree will be especially
burdensome for low-income countries such as China.
14
Ratio of Working-Age Population (15-64) to Retirement-Age Population (65+)
20
India
15
South Korea
China
10
Japan
5
US
0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast
Raising the working age would spread the growing retirement
burden among more workers.
15
Ratio of Working-Age Population to Retirement-Age Population
16
14
Working Age = 15-69
12
10
Working Age = 15-64
8
6
Working Age = 15-59
4
2
0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast

The number of potential workers per retiree will fall precipitously worldwide over the next 45 years—there
will be fewer and fewer workers per retiree everywhere. In China the number of potential workers per
retiree will drop from 9.2 to 2.6.

The fiscal implications of declining worker-retiree ratios are enormous: absent huge productivity gains,
economic output will be lower and fewer and fewer workers will be contributing to the support of each
retiree. The declining number of workers per retiree will increasingly strain national budgets as fewer and
fewer workers fund the pension and health care costs of an increasing number of retirees.

The ratios shown on the graph are based on standard historical definitions of working age, 15 to 64, and
retirement age, 65+. For China, the narrower definition of working age as 15 to 59 makes the declining
support ratio even more threatening. With this definition, the potential support ratio shown by the green line
will fall from 6 to 2 by 2050. However, extending the working age definition to 69 and retirement to 70+
would ease the fiscal burden posed by the increasing older population. In this case, shown by the blue line,
the support ratio would be significantly higher.
Page 13
Urbanization
The rapid shift toward a predominantly urban population
presents enormous challenges and opportunities.
16
Urban and Rural Population, in millions
1,600
1,400
40%
urban
2005
73%
urban
2050
1,200
1,000
Urban
800
600
400
200
Rural
0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: UN World Urbanization Prospects, 2007 Revision

By 2050, 73% of China's population of 1.4 billion people will live in urban areas. By 2050, the urban
population in China will reach 1 billion, almost twice the number in 2005. With a doubling of the
urban population, the cities in China will face enormous challenges in providing services and
maintaining infrastructure.

At the same time, the decline in rural population will pose the challenge of maintaining living
standards and social services in those areas.
Page 14
Reference
Appendix A: Alternative Fertility Scenarios
Appendix B: Comparative Reference – India, South Korea, Japan, and U.S.
Page 15
Appendix A – Alternative Fertility Scenarios
The United Nations presents four major projections for each country. The primary variable in the
alternative variants is fertility rate. The specific fertility assumptions from the World Population Prospects
2006 Revision are listed below. The data used in this report are based on the Medium variant projection.
Fertility assumptions:
• Low:
the fertility rate continues to fall until it stabilizes at 1.35 births per woman in 2020
• Constant: the fertility rate remains constant at the 2005 level of 1.70 births per woman
• Medium: the fertility rate increases to 1.85 births per woman in 2020 and then stabilizes
• High:
the fertility rate increases to 2.35 births per woman in 2020 and then stabilizes
Observations:
The median age projections range from 51 for the low fertility variant (the most rapid aging) to 39
for the high fertility variant. The projections for % 65+ range from 28% to 20%, and the potential
support ratios range from 2.2 to 2.9 in the high fertility case. All but the high fertility case result in
declining total population.

If the fertility rate declines to 1.35, by 2050 the median age will increase by 19 years to 51 and 28%
of the population will be over 65. The potential support ratio of workers to retirees will drop to 2.2
from the current 9.3.

If fertility rates remain constant, the share of 65+ will increase to 25%by 2050 and the potential
worker to retiree ratio will fall to 2.4 from the current 9.3. The median age will increase to 47.

In the medium variant used in this report, the fertility rate increases to 1.85 and median age
increases to 45. The share of 65+ will increase to 24%by 2050 and the potential worker to retiree
ratio will fall to 2.6

In the high fertility rate scenario, by 2050 the median age will increase by only 6 years to 38.7; 20%
of the population will be 65 or older, and the ratio of working-age to retirement-age people will be
2.9. The high fertility variant is the only case that produces a growing population.
Page 16
Appendix A – Alternative Fertility Scenarios
2005
Low
2030
32.5
Fertility rate = 1.35
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.316 b
7.6%
9.3
2050
43.5
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.359 b
17.4%
4.0
51.2
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.202 b
27.8%
2.2
Constant
Fertility rate = 1.70
32.5
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.316 b
7.6%
9.3
42.0
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.426 b
16.6%
4.0
47.2
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.336 b
25.0%
2.4
Medium
Fertility rate = 1.85
32.5
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.316 b
7.6%
9.3
41.3
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.458 b
16.2%
4.2
45.0
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.409 b
23.7%
2.6
High
Fertility rate = 2.35
32.5
80
40
Total pop:
% 65+:
W/R:
0
40
80
1.316 b
7.6%
9.3
38.8
80
40
0
Total pop:
% 65+:
W/R:
40
80
1.563 b
15.1%
4.2
38.7
80
40
Total pop:
% 65+:
W/R:
0
40
80
1.647 b
20.1%
2.9
Page 17
Appendix B – Comparative Reference
Fertility rates have plummeted, with especially steep drops in
China and South Korea.
Fertility (Births per Woman)
7
6
India
5
South
Korea
4
US
China
3
Replacement rate = 2.1
Japan
2
1
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast
Longevity gains have occurred everywhere.
Life Expectancy at Birth, in years
90
80
US
70
Japan
60
South
Korea
China
50
India
40
30
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations 2006 medium variant forecast
Page 18
Appendix B – Comparative Reference
Growth in the working-age population will slow everywhere;
absolute declines will occur in China, Korea, and Japan.
Percent Change in Working-Age Population (15-64), 2005-50
India
Workforce
growth will slow
US
China
So. Korea
Workforces
will shrink
2005-30
2030-50
Japan
-50%
-30%
-10%
10%
30%
50%
Source: United Nations 2006 medium variant forecast
Page 19
Appendix B – Comparative Reference
Median Age
33
China
80 60 40 20
0
20 40 60 80
41
80 60 40 20
0
20 40 60 80
2005
1.313 billion
2030
1.458 billion
24
32
India
80 60 40 20
0
20 40 60 80
2005
1.134 billion
80 60 40 20
0
20 40 60 80
2030
1.506 billion
45
80 60 40 20
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
0 20 40 60 80
2050
1.409 billion
39
80 60 40 20
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
0 20 40 60 80
2050
1.658 billion
Page 20
Appendix B – Comparative Reference
Median Age
42.9
Japan
6
4
2
0
2
4
52.1
6
6
4
2
2005
127.9 million
South
Korea
3
2
35
2
1
0
1
10
5
0
5
6
6
4
2
2
2005
299.8 million
2
3
3
2
1
0
1
15
10
5
0
5
6
2
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
54.9
3
3
2
1
0
1
2
3
2050
42.3 million
39.1
15
4
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
2050
102.5 million
2030
48.4 million
10
0
48.1
36
United
States
4
2030
118.3 million
2005
47.9 million
15
0
54.9
10
2030
366.2 million
41.1
15
15
10
5
0
5
10
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
15
2050
402.4 million
Page 21
The Global Aging Program at the Stanford Center on Longevity focuses on the economic and political
implications of longevity. The program specifically addresses the risks and opportunities of differential
population aging around the world and the impacts on global economics, sustainability, and US national security
interests.
The Stanford Center on Longevity seeks to transform the culture of human aging using science and technology.
Working as a catalyst for change, the Center identifies challenges associated with increased life expectancy,
supports scientific and technological research concerning those challenges, and coordinates efforts among
researchers, policymakers, entrepreneurs, and the media to find effective solutions. SCL was founded in 2006 by
Professor Laura Carstensen and received its initial funding from Richard Rainwater. The SCL Advisory Council
includes George Shultz, former U.S. Secretary of State, and Jack Rowe, former Chairman and CEO of Aetna.
Adele Hayutin, Ph.D., Senior Research Scholar and Director of SCL's Global Aging Program, is a leader in the
field of comparative international demographics and population aging. Dr. Hayutin combines broad knowledge
of the underlying data with the ability to translate that data into practical easy to understand language and
implications. She has developed a comparative international perspective that highlights surprising demographic
differences across countries and illustrates the unexpected speed of critical demographic changes. Previously
she was director of research and chief economist of the Fremont Group (formerly Bechtel Investments) where
she focused on issues and trends affecting business investment strategy. Dr. Hayutin received a BA from
Wellesley College and a Master's in Public Policy and a Ph.D. from the University of California at Berkeley.
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