Translated with AI
China is monetizing its accelerating population aging by aggressively developing a “silver economy”: the production and consumption of goods and services aimed at older people.
People started talking about the aging of the population in China at the beginning of the last decade: since 2012, the number of working-age people in the country has been declining. Since then, the process has been steadily gaining momentum: if at the beginning of the century the number of those over 60 in China was 10% of the total population, then by the end of 2023 the figure exceeded 20%, and by 2035 it could reach 30%, demographers predict.
The growth of the pensioner army is caused by both demographic and administrative reasons. On the one hand, this is the decline in the birth rate in China. In 2019, it fell below the psychologically important threshold of 15 million, and today less than 10 million babies are born per year in the country.
On the other hand, life expectancy in China is constantly growing due to the increase in the level of well-being of the population and an effective health care system. Just the other day, researchers from the University of Washington called the health care system of China the most effective in the world. They came to this conclusion by compiling an index of inefficiency of health care systems for 201 countries of the world. China turned out to be the only country with an inefficiency index equal to zero.
The index is calculated as the difference between life expectancy at the most efficient use of the current level of investment in health care and the actual average life expectancy in a given country. "A zero index for China means that investment in health care is converted into increased life expectancy as efficiently as possible," the authors of the study noted.
Thanks to this, in the PRC, by the end of 2024, the average life expectancy reached 79 years, reaching eighty for five provinces. Over the past four decades, the average life expectancy in China has increased by 11 years.
At the same time, the authorities did not raise the retirement age. The reform of the gradual increase in the retirement age in the country was launched only this year. For men, it will increase from 60 to 63 years, for women engaged in physical labor – from 50 to 55, for women "white collars" – from 55 to 58. This reform will be carried out for 15 years, which guarantees a further expansion of the army of pensioners. According to the forecast of the Ministry of Civil Administration of the PRC, the number of old people in the PRC in the next decade will grow at a rate of 10 million people annually.
The authorities understand that an increase in the number of pensioners could place a heavy burden on the budget and create the preconditions for a drop in demand in domestic markets, since the older generation in China today is not particularly active in consumerism.
In order to mitigate these risks, it was decided to actively involve pensioners in the national economic system, with priority given to developing the "silver economy". Thus, the government's work plan for 2025 stipulates "to take active measures to respond to the aging of the population, improve measures and mechanisms aimed at developing the sphere of ensuring a dignified old age and the industry associated with it, and actively develop the "silver economy".
These measures are already being actively implemented, as evidenced by the semi-annual report of the State Tax Administration of the People's Republic of China. According to statistics, in the first half of the year, the revenue of services for the care of the disabled and the elderly increased by 40.9%. Tourism, sports and entertainment services specially adapted to the needs of the elderly are developing: growth for the half-year amounted to 26.2%, 23.9% and 20.7%, respectively.
The number of companies producing products aimed at the elderly increased by 14.1%. Revenue from sales of sports equipment for the elderly increased by 14.7%, dietary supplements developed for the needs of the elderly – by 30.1%, hearing aids and mobility aids for the elderly – by 32.2%.
At the same time, the state is creating new growth opportunities for specialized industries. Thus, on July 23, the PRC launched a program to issue consumer vouchers for pensioners with disabilities. They will cover up to 60% of the costs of home care and food.
Chinese lawmakers say the principles and measures to stimulate the "silver economy" will be further specified in the 15th Five-Year Plan (2026-2030) and related documents, which are expected to be adopted next year.
By 2035, China's "silver economy" is projected to account for up to 9.5% of GDP. This ensures that China's continuing population aging does not become an unbearable burden on the national economy.
Konstantin Shchepin
