Early in the morning in cities across China, groups of people gather in public squares, moving as one in slow, deliberate tai chi routines. Many are in their sixties or seventies – an age group that has long defined the rhythm of daily life in much of the country.
While these dedicated practitioners have been a part of the national routine for decades, their ubiquity carries new connotations as the country undergoes a profound shift in population dynamics: China is growing old, fast.
As of last year, 20 of the country’s more than 30 provincial-level regions had entered what demographers call a “moderately-aged society”, where at least 14 per cent of residents are aged 65 or above, or one-fifth are over 60.
In 2018, only six of these regions – Liaoning, Shanghai, Shandong, Sichuan, Jiangsu and Chongqing – had reached the threshold, according to contemporaneous records from China’s National Bureau of Statistics.
That trend, compounded by a steady decline in birth rates, means the country’s working-age cohort is also on the wane, creating a major challenge for policymakers as they seek to ensure sustainable economic growth.
As Beijing expands elderly care networks, raises the retirement age and gives out subsidies to new parents, businesses are also eyeing the “silver economy” of goods and services catering to seniors as both a social challenge and a golden opportunity.
“The impact of population ageing on China’s economic structure is broad, multidimensional and deeply rooted, and it affects nearly every aspect of the economy,” said Xia Ri, a researcher with Anbound, a Beijing-based public policy consultancy.
“At the macro level, China faces the accelerated loss of its demographic dividend, growing risks to the sustainability of its social security system, mounting challenges in healthcare and increasing fiscal strain. At the micro level, ageing is reshaping family structures, cultural norms and traditional notions of filial piety,” Xia added, referring to the Confucian concept of a lifelong duty to care for one’s parents.
The government is moving quickly to respond. In its proposal document for China’s next five-year plan, published last month, the ruling Communist Party’s Central Committee called for “improving the supply of basic elderly care services, expanding urban-rural care networks, and upgrading public infrastructure to make it more accessible”.
The committee also recommended promoting integrated medical and elderly care, rolling out long-term care insurance and strengthening support systems for seniors with disabilities or dementia.
Additionally, a policy document jointly issued by several government departments last year encouraged the development of “smart home-based elderly care beds”, encouraging private and community providers to offer meal delivery, bathing, medical, mobility and emergency aid services for elderly residents.
Yang Chenggang, a professor at Southwestern University of Finance and Economics and an adviser to China’s National Health Commission, said “community-based elderly care, which sits between home and institutional care, should play a greater role”.
He suggested an “upgraded version” of community care, where seniors can stay home but receive on-demand services such as home visits and daily support, assisted by technologies like artificial intelligence (AI).
China’s population has fallen for three consecutive years, dropping to 1.408 billion in 2024 after peaking in 2021, as deaths continued to outnumber new births.
Fewer people appear willing to start families due to rising living costs, intense work pressures and shifting social attitudes towards marriage and parenthood, prompting new financial incentives to alleviate the burden. This includes a national childcare subsidy programme, which provides up to 10,800 yuan (US$1,516) per child under the age of three.
Meanwhile, the share of those aged 65 and above in China’s population rose to 15.6 per cent in 2024, up from 13.5 per cent in 2020, according to official statistics, deepening concerns over the nation’s accelerating demographic decline.
The country’s pension system is also coming under strain, widening existing funding gaps as fewer workers support more retirees. The main public pension fund could run into deficit by the mid-2030s, according to projections from the Chinese Academy of Social Sciences, as contributions fail to keep pace with payouts.
According to Tianzeng Xu, deputy economist for China at the Economist Intelligence Unit, the old-age dependency ratio – the number of workers supporting each retiree – is expected to double by 2040, from roughly six workers per retiree today to just three.
“This could erode pension replacement rates and test intergenerational fairness,” he said, adding that “population ageing will dampen China’s potential economic growth by curbing innovation and slowing aggregate demand”.
To help address this shortfall, China has raised the retirement age by up to five years. Over a 15-year period which began January 1, the retirement age for men will rise from 60 to 63, and the age for female office workers will move from 55 to 58. Female blue-collar workers, who could previously retire at 50, will have to wait until they reach the age of 55.
While the previous retirement ages were some of the lowest in the world, even after the increase they will still be below those in most developed economies. In Japan, people can begin receiving pensions at 65, while in South Korea, the pension age is 63.
Last year, China had about 310 million people aged 60 and above. Accounting for 22 per cent of the population, up from 15.5 per cent just a decade ago, it is a cohort nearly equal to the entire population of the United States, and well ahead of the country’s 240 million children under 15.
And while the trend tends to be considered in light of the headaches it creates for policymakers, it also carries a “silver” lining in terms of market potential.
According to a report from the China Association of Social Welfare and Senior Service released in December 2024, the value of the country’s “silver economy” – the industries serving older adults – was worth about 7 trillion yuan (US$983 billion), or 6 per cent of gross domestic product. By 2035, the association projected it would reach 30 trillion yuan, accounting for around one-tenth of GDP.
Industries tied to ageing – including elderly care, health services, financial products and leisure – are expected to see explosive growth, the association said.
“The rise in income levels has shifted older people’s needs, from being primarily survival-oriented to development-oriented,” said Yuan Xin, a demography professor at Nankai University in Tianjin.
Those born after the 1950s, he noted, have seen steady income growth and their lifestyles shaped by new technologies such as the internet, artificial intelligence and big data, resulting in more diverse consumption demands and preferences.
“From smart healthcare products and rehabilitation aids to anti-ageing services, elderly finance and senior tourism – as well as society-wide ageing-friendly renovations – these trends will greatly improve the quality of life for older adults,” Yuan said.
Smart wearable devices that track heart rate, blood pressure and step count have become “trusted companions in the daily lives of many elderly people”, he added.
But while this trend is being observed in most parts of the country, it is not uniform.
The north is ageing faster than the south, with 12 of the 20 provinces meeting the standard for a “moderately-aged society” located above the Yangtze River.
The three regions farthest to the country’s northeast – Liaoning, Jilin and Heilongjiang provinces – are among the oldest in the country, each with around one in five residents aged 65 or above, a level approaching what the World Health Organization calls a “super-aged society”.
Liaoning has the highest share of elderly residents nationwide, with almost one in three people aged 60 or older.
By contrast, Guangdong remains one of China’s youngest areas – behind only the Tibet and Xinjiang autonomous regions in the country’s far west – thanks to a steady inflow of migrant workers and relatively high birth rates.
It has been the nation’s top province for births for seven consecutive years, and the only one still recording more than 1 million newborns annually.
Even so, Guangdong is expected to cross the “moderately-aged” threshold by 2030, the province’s civil affairs department has projected.
With the absolute headcount of the country’s labour force all but guaranteed to drop in the coming years, curbing growth potential, some economists view automation and AI as potential buffers, along with other increases to labour productivity.
More immediate challenges are thought to be emerging on the demand and consumption sides. With a youth-unemployment rate persistently above 15 per cent, among other factors, Lu Ting, chief China economist at Nomura, said in an October report that “in 2026-30, the main economic impact of worsening demographics will be felt ... as consumers lower their spending on areas such as infrastructure, homes, kids and weddings”.
Small cities will be hit especially hard, he said, as young people attend universities in large cities and often stay there to work. - SOUTH CHINA MORNING POST
