China’s Economic Growth Prospects

China’s Economic Growth Prospects

From Demographic Dividend To Reform Dividend

Cai Fang

In this book Cai Fang explores the contribution of demographic transition to economic growth in China’s reform period, depicts the population factors causing the economic slowdown since the second decade of the twenty-first century, analyses the challenges facing its long-term sustainability when the demographic dividend is disappearing, and proposes important policy remedies. He suggests that in order to avoid the middle-income trap, China's economic growth has to transform from an inputs-driven pattern to a productivity-driven pattern, which requires eliminating several institutional obstacles.

Chapter 5: Growing old before getting rich

Cai Fang

Subjects: asian studies, asian economics, economics and finance, asian economics, labour economics


Extend the care of the aged in one family to that of all families. (Mencius) When describing properties of the population’s age structure by employing graphs of population pyramids, early textbooks of demography usually use as examples one developing country and one developed country. The age structure of the developing country is characterized as a typical pyramid with a broad base of youth and a sharply tapering top of the elderly, whereas the age structure of the developed country is quite the opposite, characterized by a narrower base of youth and broader top of the elderly. The latter case results from low fertility and population aging. More recently, drawing the population pyramids of China in different years, say 1982 and 2010, is sufficient to compare these contrasting phases of demographic transition. The change in the population age structure in China not only reflects the population aging that results from economic and social developments in general, but also indicates a population that is aging more rapidly than the speed of income growth. Such a gap in the progress between the demographic transition and income growth in China can be expressed as “growing old before getting rich.” This chapter is intended to describe this unique feature of China’s demographic transition and to discuss the special challenges it poses to the sustainability of China’s economic growth.

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