“China will grow old before it gets rich” is, by now, a cliche among China-watchers. But it’s true. The same demographic wave that has gifted China with an abundance of labor will soon also transform the country into the world’s biggest retirement home.
Beijing’s “one-child” policy has sharpened the trend. Today China has 16 retirees per 100 workers. Projections see that increasing to 64 retirees per 100 workers by 2050, resulting a much grayer population than in America.
This has indirect—but serious—implications for China’s defense. Most Chinese do not have retirement benefits and in their old age must rely on personal savings or family … a difficult proposition when there is only one child to take care of two parents.
If Beijing wants to preserve household savings and productivity, it will have to build some kind of social welfare system. And that means making some difficult choices.
China’s borders are secure. The U.S., Japan and India cannot bring down the Chinese government. But tens of millions of desperate Chinese families could do so—and just might, if Beijing can’t find some way to care for them as they age.