China's demographic challenges

Comments on Zhongwei Zhao "Tackling China’s demographic challenges", 21/01/2016

It is stated that: “Instead in the 1980s China’s Total Fertility Rates (TFRs) fluctuated between 2.2 and 2.9 children per woman. But by the early 1990s, the strong family planning program and profound socio-economic transformation led China’s fertility to fall below replacement levels for the first time. Since the mid-1990s, TFRs have generally remained below 1.6 children per woman.”

Those rates are far from the target of family planning policy, one couple one child, even taking into account children mortality rate. Are they correct?

In the last paragraph, it is remarked that: “Yet, whether this, and other development strategies, will be sufficient to cope with the great socio-demographic changes brought about by China’s rapid urbanisation, ageing population and persistently low fertility rate remains a debatable question.”

Surely, the persistent fertility rate will change after the change in the family planning policy to allow two children per couple, though it may take time to see real effects.

REply to comments by Rechard: I agree it will take long time, a generation’s perhaps, for the new born to become labour force. However, it is possible that people may have different incentives/motives in relation to supporting their old parents and raising children. That means people with another children may work harder or smarter if they can to raise the child. That, though tangentially, be positive to the economy, I would reckon.

How will the government provide more schools for them? That is part of the challenges China will face, though it is not insurmountable. China is transitioning to a more service dominated economy and the education sector will be part of that. Financially, China, like any or at least most countries, must prioritise government spending and education should be a priority due to its many positive effects and spill overs, not to mention its role as part of people’s basic “rights”.

How to tackle people living longer and population aging? In theory, it should not be too hard to do actually. When people live longer, their economic productive life will be longer accordingly. So government can introduce policies/incentives to encourage people who can still work to work longer.

One may say some people may not be able to continue their labour types of work. That may be true, but with adequate retrain, they Further, if old people have adequate superannuation, like the policy in Australia, most of them can live off their own superannuation, though it may take time, indeed very long time.

Having said that, what I mentioned is easy said than done. General policy prescriptions is not hard, but get them in place and implement them in the right way are much harder.

Optimal future population path in Australia

Comments on Oliver Marc Hartwich “Australia's choice between growth and decline”, 15/07/2010, http://www.businessspectator.com.au/bs.nsf/Article/Julia-Gillard-Tony-Abbott-population-immigration-m-pd20100714-7C5GT?OpenDocument&src=sph
The lessons from European demographic changes in the past decades should not be just that as Dr Oliver Marc Hartwich implied.

The most important lesson is how to respond to future population changes, as opposed to continuing a growth path as Dr Oliver Marc Hartwich suggests.

For Australia, there are three potential demographic paths for future: growth, stable or decline.

Given that it is the per capita growth in GDP or wealth that is most important to the population at large, each potential scenario can be managed reasonably in Australia as long as the population decline is not too rapid and certainly that can be managed to achieve without too much difficulty.

Australia has the luxury of time to consider and plan for future population path and the flexibility of immigration if needed at its disposal that was not necessarily all available to the European nations at that time in the past.
In my view, Dr Oliver Marc Hartwich's view misses the most important point and lacks a clear strategic version.

Given the challenges from climate change and natural resources, my gut feeling is that the best path for future Australian population is more likely to be a relatively stable one.

Having said that, I must qualify that statement by saying that we need more studies before we can firmly decide what will be best for us.

Greater strategic framework needed

Comments on Peter McDonald “Demand for workers will outstrip fear about resources”, 10/05/2010, http://www.theaustralian.com.au/news/opinion/demand-for-workers-will-outstrip-fear-about-resources/story-e6frg6zo-1225864239240

With all respect, it seems that Peter McDonald, director of the Australian Demographic and Social Research Institute at the Australian National University, is using nothing more than only partial arguments to support his points. And that is a pity and regrettable in terms of informing the debate and the public.

People know that it is notoriously difficult to forecast the economy, the resource sector particularly when it is driven by overseas demand and labour demand due to the resource sector. In that case the advantages of forecast of labour demand for certainty for population and immigration planning purpose would certainly be overwhelmed by the uncertainty created by any forecasts, no matter how credible and reasonable one might consider they are.

So, the argument for immigration planning based on forecast of resources sector growth is nice in name only and naive and impractical.

However, that does not mean immigration cannot be part of the solution to any labour shortage. Everyone knows that we can vary immigration intake very easily, that is to either increase or decrease as the domestic demand changes.

So the latter solution is much better than what McDonald argues.

The lesson from this is that many studies, while well intended, may fall far short than what are needed to be reliable and credible, because of their narrow focuses, or the limitations of their authors, if not greater strategic framework is considered.

Population aging - Australia should not be too selfish

Comments on Bernard Salt “Levers available to make up for exit of boomers”, 8/10/2009, http://www.theaustralian.news.com.au/story/0,25197,26179529-5016345,00.html

Salt’s argument sounds good from purely Australia and Australians point of view: to us immigration to solve population aging in Australia. There is no doubt about that logic and policy makers, bureaucrats and even the ABS have been using that argument explicitly or implicitly.

But what are the implications of this Australian story for the rest of the world, especially those countries where the migrations might come from? Would the Australian immigration help them solve their demographic changes?

If the answer is yes, the Australian immigration story is well and good. However, if the answer is no, then the Australian story is a selfish one: it would grab useful workforces from other countries to serve Australians only.

Of course, Salt argued that “Targeted migration aimed at fit young workers is a good deal for Australia, and in many cases for origin nations as well. Migrant workers pay tax and they also send money back to family groups. Total remittances paid from Australia over the last financial year were $816m. Our total foreign aid budget is just $3.8bn.”

Not bad, it sounds. However, it is questionable the $816m figure was really from migrated young workers and I doubt the statistics will be able to show that it was.

The second problem with this remittance story is the more significant problems of “brain drain” in those countries. Even the $816m was credible as the remittances from migrated young workers, it is unclear whether that could outweigh the losses those countries incurred due to the loss of those young worker to Australia.

To conclude, demographic changes and population aging is a wider issue than Australia’s alone and need to be considered in that wider context. Australia should not be too selfish and just consider enhancing only its interest at the expenses of other nations especially developing nations.

Maybe we are not used to this thinking yet. But it is time we approach the population issue holistically than we were used to. We need to consider a win-win outcome for all nations involved.

Older people working - a pool of treasure

Comments on ABC news report “Older Australians the hidden unemployed: study” by Dina Rosendorff for AM, 30/07/2009, http://www.abc.net.au/news/stories/2009/07/30/2640430.htm?section=justin

It is hidden unemployment, and it is a huge waste of valuable human resources.

The government has increased the pension age from 65 to 67 in the 2009 budget, in the name of dealing with a long term structural budget issue related to population aging. While I personally do not agree it is a good public policy measure and I like to provide more choices to people especially older people as opposed to forcing on people, it can be understandable why the government is doing it.

What is more important for the nation in dealing with population aging and demographic changes is a cultural change and a change in our thinking. Nowadays most people work in office or as a clerk or salesperson type of job. Most is not doing hard labour type job. Given the increase in longevity and health, most people are still capable of continuing working well into their late 60s or even early 70s.

Even those doing hard labour type jobs should still find other less labour demanding type of work to suit their physical health conditions.

The more people who are engaged in working, the higher the average income and national welfare. But more importantly, when people especially older ones are engaged in working voluntarily they are happier and living a better life, while reducing the pressure of aged pension.

All Australians, especially employers, need to tap into this pool of national treasure. It is and should not a difficult issue. It is a conceptual issue. It is an attitude issue. It is a cultural issue. And it is a thinking issue. It can be easily changed. And we can make that change and improve the lives of our older people and ours as a result.

What are we waiting for? Let’s do it, and start doing it now!

Aging population - strengths or weaknesses?

Comments on zhangyiduo的日志【转载】印度超越中国的两件秘密武器, http://www.pinggu.name/space-124928-do-blog-id-17298.html

It is never a good strategy to worry about other nations may exceed you one day.

The correct strategy is to learn to become and be the best and stay at best, always.

The contribution of language should be fairly trivial to the success of otherwise of a nation. Japan, Germany, for example, did not rely on English to succeed.

As to population age composition, it is as less important as one can put it to be. Time has changed. Nowadays, it is human "capitals" not labour force per se that is important for the economy. Population aging is a red herring. If you can tap into the wisdom and knowledge and skills of older population, you will get wealth of strengths, as opposed to weaknesses.

We need to analyse issues. It is not enough to just believe what you are hearing or have heard.

New time and new issues require new strategies. Don't fall into the trap of some conventional fallacies.