Grey Area

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 greying 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 labour, China may soon face manpower shortages. An ageing population also poses difficult political issues for the Communist government, which first encouraged a population explosion in the 1950s 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 labour shortages, but officials fear that abolishing it could release a flood of humanity that would swamp the cities. As workers become scarcer and more expensive in the increasingly affluent cities along China’s eastern seaboard, the country will face growing economic pressures to move out of assembly work and other labour-intensive manufacturing, which will be taken up by poorer economies in Asia and beyond, and into service and information-based industries.

“For the last two decades, China has enjoyed the advantage of having a high ratio of working-age people in the population, but that situation is about to change,” says Zuo Xuejin, vice-president of the Shanghai Academy of Social Sciences. “With the working-age population decreasing, our labour costs will become less competitive, and industries in places like Vietnam and Bangladesh will start becoming more attractive.”

India, the world’s other emerging giant, also stands to benefit, with low wages and a far younger population than China.

Even within China, Zuo says, many foreign investors have begun moving factories away from Shanghai and other eastern cities to inland locations, where the work force is cheaper and younger.

As remote as many of these problems may seem today in Shanghai, the country’s most prosperous city, evidence of the changes is already on abundant display. If Shanghai represents the future of China, it is in central Shanghai’s Jingan district, where roughly 4,000 people, or 30 per cent of the residents, are above 60, that one can glimpse that future. Squads of lightly trained social workers monitor the city’s older residents, paying regular house visits aimed at combating isolation and assuring that medical problems are attended to.

At 10 am on a recent spring morning, Chen Meijuan walked up a narrow wooden stairway to the second-floor apartment where Liang Yunyu has lived for the last 58 years. “Good morning, granny,” Chen calls out as she enters the 100-year-old woman’s small bedroom. “Did you have a good night’s sleep?”

Chen, 49, earns about $95 a month as one of 15 agents who monitor the neighborhood’s elderly population. Her caseload exceeds 200. “I usually pay visits to about five or six households a day, stay a little while and chat with them,” she says. “For Grandma Liang I am a little more focussed, visiting two or three times a week.”

After being introduced to a foreign visitor, Liang regales her guests with stories, ranging across the decades of the 20th century. She recounts the arrival of Japanese invaders in the city nearly 70 years ago, her opening of a kindergarten in 1958 and her husband’s arrest and death in a labour camp during the Cultural Revolution 40 years ago.

“My daughter always invites me to live with her family, but I feel embarrassed to be with them,” pauses Liang, “I’m worried I might die in her home, so I prefer staying where I am.”

Her son, Zha Yuheng, 76, a grandfather and retired textile industry worker, lives with her now, which also concerns her. “I am taken good care of here,” she says, “but living with my son leaves him with a big burden, I’m afraid.” Zha protests that his mother is little trouble at all.

In many wealthy societies, the very old are candidates for nursing home care. That sector is still tiny in China, though, especially compared with the size of the elderly population. Zhang Minsheng opened the city’s first private nursing home in 1998 in an industrial area far from central Shanghai. It is now 95 percent occupied.

“People were not willing to enter nursing homes in the past, because they were considered places for those without descendants,” says Zhang. “Now, from the standpoint of ordinary people, it is becoming a normal thing.”

The average age of the residents of Zhang’s home is 85, and most live several to a room, sleeping on narrow beds separated by flimsy partitions. Many pass the daytime hours in long corridors furnished with chairs, where they chat or simply stare into the distance.

The sheer magnitude of the ageing phenomenon has Chinese officials and academics grasping for answers, but almost everyone agrees that there are no easy fixes. Population experts here speak of “patching one hole and exploding another”.

China has a wide range of retirement ages, generally from 50 to 60. Raising the retirement age would relieve pressures on the pension system but make it harder for young people to find jobs. And it would be resented by many elderly people, most of whom have missed out on China’s economic boom. Lifting restrictions on internal migration raises the unwelcome prospect of a mass migration, while abandoning the one-child policy would be politically unpalatable.

The government has already tinkered with the policy. It now allows husbands and wives who were their parents’ only children to have a second child, for example, and has eliminated a four-year waiting period between births for those eligible to have a second child.

But Chinese demographic experts say the leadership is unlikely to abolish the one-child rule, because it is reluctant to admit that one of its signature policies was in any way a failure, particularly in view of the disastrous population boom encouraged by Mao in the 1950s.

Moreover, lifting child-bearing restrictions might not help. Poorer people in the interior might have more children, but the rising middle class probably will not, experts say.

“More births would only change the structure of the population and prolong the ageing process” of the society as a whole, says Ren Yuan, a professor at the Population Research Center of Fudan University in Shanghai. “But it has nothing to do with the number of old people. The scale of this large group has already become a reality. The beds you’ve got to add in nursing homes, the labour you need to take care of the old, is a reality than can’t be changed.”