Aging population may shrink Chinese workforce by 10 per cent

Beijing, Dec 9: An aging population could shrink the number of working-age adults by more than 10 per cent in China by 2040, a World Bank report said on Wednesday.

It means a net loss of 90 million workers in the country until that time, according to the report named "Live Long and Prosper: Aging in East Asia and Pacific".

"Developing middle-income countries in east Asia, such as China, are already aging quickly and face some of the most pressing challenges in managing aging," China Daily quoted the report as saying.

East Asia, as the Word Bank's research showed, is aging faster than any other region in history. Nearly 36 percent of the world's population aged 65 and over, or 211 million people, live in this region, which is the largest share among all regions in the world.

The report warned that the rapid pace and sheer scale of aging in east Asia raises policy challenges, economic and fiscal pressure, as well as social risks.

"Without reforms, for example, pension spending in the region is projected to increase by eight to 10 percent of GDP by 2070."

Axel van Trotsenburg, regional vice-president of the World Bank's East Asia and Pacific Region, said on Wednesday that "east Asia Pacific has undergone the most dramatic demographic transition we have ever seen, and all developing countries in the region risk getting old before getting rich".

He suggested a comprehensive policy approach across the life cycle to enhance labour-force participation and encourage healthy lifestyle through structural reforms in childcare, education, healthcare, pensions, long-term care and more.

The report also recommends a range of pressing reforms in China, including removing incentives in pension systems that have encouraged some workers, especially urban women, to retire too early.

Developing countries in the region can take steps to reform their existing pension schemes, including considering gradual increase in retirement age, it said.

IANS