China’s Workforce Is Aging and Money Is Running Out

However, fighting for decades to get ahead seems to have set China back a peg or two. They currently face issues with their economy to stay ahead of America, due to their aging population, downturn in production, and failing fertility rates.

The country reported a 5.1% overall unemployment rate with young people making up the majority. However, China recently changed the reporting system, not allowing those in rural areas and those who have simply given up on finding work to account for the unemployment rate, so the current rate is unclear.

As large corporations and factories penny pinch to increase profits, the working class will remain shielded from economic movement. China has little rules around minimum wage and workers rights, so the rich will continue to get richer, while the workforce remains in the same place.

A University of Wisconsin-Madison scientist named Yi Fixian tells Newsweek that China’s projection of growth cannot happen with the current ages of the workforce. The elderly simply cannot keep up with the physical abilities of youth, and the economy is sure to suffer because of it.

For years, the one child policy has been a mainstay in China, only allowing families to produce one child in order to quell the ever-growing population. However, new issues have arisen that cause China’s youth to forgo having children altogether.

As the population shrinks and less young people enter the workforce, new education, ideas, and inventions will not offset the number of elderly in society. Usually, a society functions by phasing out older workers and old ideas, but China is on track to hold onto older workers without replacing them with better and younger technologies.

As many nations depend on the buying power of young people to boost their economy, China will face major issues with internal economic growth. Yi Fixian notes in Newsweek that younger generations are the driving force for any country’s economic growth.

Experts in China have stated that the country will achieve “high-income status” and reach half of the United States’ GDP by 2049. However, the country’s current income stands around $12,500, while the per capita income stands at about $80,000 in the US, with little hope for China to catch up to even half that.

Per capita income is the average income of a citizen in a country. Unfortunately, China cannot promise a rise in per capita income for its citizens. Even hopeful charts show a measly 3% increase by 2028, rising to only $15,426.

While China was once the manufacturing mecca for the western world, Newsweek notes that shifts in prices and transportation have all affected their biggest export.

As life expectancy grows, older generations remain working, and younger people have less buying power, property sales continue to slow down. The shrinking property market is another blow to overall economic growth in China.

However, the changes will not be easy to undo, stay out of the middle-income trap, grow the economy, and find a permanent solution to the fertility crisis.