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China’s ageing population: A demographic crisis is unfolding for Xi Wednesday, 03 April 2024

China’s ageing population: A demographic crisis is unfolding for Xi

Ask 72-year-old farmer Huanchun Cao about his pension and he reacts with a throaty cackle.

He sucks on his home-rolled cigarette, narrows his brow and tilts his head - as if the very question is absurd. "No, no, we don’t have a pension," he says looking at his wife of more than 45 years.

Mr Cao belongs to a generation that witnessed the birth of Communist China. Like his country, he has become old before he has become rich. Like many rural and migrant workers, he has no choice but to keep working and to keep earning, as he’s fallen through a weak social safety net.

A slowing economy, shrinking government benefits and a decades-long one-child policy have created a creeping demographic crisis in in Xi Jinping’s China.

The pension pot is running dry and the country is running out of time to build enough of a fund to care for the growing number of elderly.

Over the next decade, about 300 million people, who are currently aged 50 to 60, are set to leave the Chinese workforce. This is the country’s largest age group, nearly equivalent to the size of the US population.

Who will look after them? The answer depends on where you go and who you ask.

Chart showing China’s population is ageing fast

Mr Cao and his wife live in the north-eastern province of Liaoning, China’s former industrial heartland.

Vast swathes of farmland and mined hills surround the main city of Shenyang. Plumes of smoke from smelting factories fill the skyline, alongside some of the country’s best-preserved world heritage sites from the Qing dynasty.

Nearly a quarter of the population here is 65 or older. An increasing number of working-age adults are leaving the heavy industries hub in search of better jobs in bigger cities.

Mr Cao’s children have moved away too but they are still close enough to visit often.

"I think I can only keep doing this for another four or five years," Mr Cao says, after he and his wife return from collecting wood. Inside their home, flames crackle beneath a heated platform - called a "kang" - which is their main source of warmth.

Xiqing Wang/ BBC Mr Cao walking down the street Xiqing Wang/ BBC

Mr Cao lives in what used to be China’s industrial heartland

The couple make around 20,000 yuan (£2,200; $2,700) a year. But the price for the corn they grow is going down and they cannot afford to get sick.

"In five years, if I’m still physically strong, maybe I can walk by myself. But if I’m feeble and weak, then I might be confined to bed. That’s it. Over. I suppose I will become a burden for my children. They will need to look after me."

That is not the future 55-year-old Guohui Tang wants. Her husband had an accident at a construction site and their daughter’s university education drained her savings.

So the former digger operator saw an opportunity in elderly care to fund her own old age. She opened a small care home about an hour from Shenyang.

Xiqing Wang/ BBC Guohui Tang Xiqing Wang/ BBC

The care home Ms Tang runs is her retirement plan

The pigs and geese both honk a welcome at the back of the single-storey house surrounded by farmland. Ms Tang grows crops to feed her six residents. The animals are not pets - they are also dinner.

Ms Tang points to a group of four playing cards as the sun shines through the small conservatory.

"See that 85-year-old man - he doesn’t have a pension, he’s relying entirely on his son and daughter. His son pays one month, his daughter pays the next month, but they need to live too."

She is worried that she too will have to depend on her only daughter: "Now I will pay my pension every month, even if it means I cannot afford to eat or drink."

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For generations, China has relied on filial piety to fill the gaps in elderly care. It was a son or daughter’s duty to look after ageing parents.

But there are fewer sons and daughters for ageing parents to rely on - one reason is the "one-child" diktat which prevented couples from having two or more children between 1980 to 2015.

Xiqing Wang/ BBC Residents at Ms Tang’s care home Xiqing Wang/ BBC

Residents at Ms Tang’s care home

With rapid economic growth, young people have also moved away from their parents, leaving a rising number of seniors to look after themselves or rely on government payments.

But the pension fund could run out of money by 2035, according to the state-run Chinese Academy of Sciences. That was a 2019 estimate, before the pandemic shutdowns, which hit China’s economy hard.

China may also be forced to raise the age of retirement, which has been on the cards for years. It has one of the lowest retirement ages in the world - 60 for men, 55 for white-collar women and 50 for working-class women.

But economists say this is just tinkering around the edges if China is to avoid what some fear could become a humanitarian crisis in 25 years.

Meanwhile, more and more elderly have been dipping into their pensions.

Xiqing Wang/ BBC The Fengs in their room at the Sunshine Care Home Xiqing Wang/ BBC

The Fengs in their room at the Sunshine Care Home

"Welcome to my home," beckons 78-year-old Grandma Feng, who only wanted to use her last name.

It’s hard to keep up with her as she races along the corridor to warn her husband that guests are on the way to their room at the Sunshine Care Home. The morning exercise class, where she had been giggling and gossiping at the back with her friends, just ended.

The home was built to house more than 1,300 residents. Around 20 young people volunteer to live here for free in return for helping to look after some of the elderly. Private companies partly fund the home, taking the pressure off the local government.

This is an experiment as leaders hunt for solutions for an ageing China. Here in Hangzhou, in southern China, they can afford such experiments.

This is a different world from Liaoning - the shiny new buildings that are rising up host tech companies such as Alibaba and Ant, a magnet for ambitious, young entrepreneurs.

The Fengs have been here for eight years. The nursing home seems friendly and there is plenty to do - from gym and table tennis to singing and drama.

Xiqing Wang/ BBC A man plays table tennis and a woman take a dance class at the Sunshine Care Home Xiqing Wang/ BBC

There are plenty of activities to occupy the residents at Sunshine Care Home

"It is very important to be able to finish the last part of life at a good place," Grandma Feng says. She and her husband have been married for more than 50 years. It was love at first sight, they say.

When their grandson graduated from junior high school, they decided their task was complete.

"There are few people of the same age who think like us," Grandma Feng says. "It seems we care more about enjoying life. Those who don’t agree think it’s unnecessary to pay a lot of money to live here while they have their own house."

But she says she is more "open-minded": "I thought it through. I just gave my house to my son. All we need now is our pension cards."

The couple’s room at the care home costs around 2,000 yuan a month. As former employees of state-owned companies, they both have enough of a pension to cover the cost.

Their pension is far higher than the average in China, around 170 yuan a month in 2020, according to the UN’s International Labour Organization.

Xiqing Wang/ BBC  Residents in the conservatory at the care home run by Guohui Tang Xiqing Wang/ BBC

Ms Tang’s clients - poor and often pension-less - are a stark contrast to those in the Sunshine Care Home

But even with clients with decent pensions, the Sunshine Care Home is running at a loss. The director says care homes are costly to start and take time to turn a profit.

Beijing has been pressuring private firms to build daycare centres, wards and other age-care infrastructure to shore up gaps left by indebted local governments. But will they continue to invest if profits are far off?

Other East Asian countries such as Japan are also searching for funds to care for large numbers of elderly. But Japan was already wealthy by the time it had one of the world’s largest ageing populations.

China, however, is ageing fast without that cushion. So, many older people are forced to make their own way - at an age when they should be planning their retirement.

Chart showing number of workers supporting retirees expected to fall

Fifty-five-year-old Shuishui found a new career in what is being called "the silver-haired economy" - an attempt to harness the buying power of middle-class seniors.

"I think what we can do is try to influence the people around us to be more positive, and to keep on learning. Everybody might have different levels of household income, but whatever circumstances you are in, it’s best to try to be positive."

Shuishui knows she is part of a privileged lot in China. But she is determined to hope for the best. The former businesswoman is now a newly-trained model.

On the sunny banks of the Grand Canal in Hangzhou, she and three other women, all over 55, are touching up their make-up and hair.

Xiqing Wang/ BBC Shuishui (first from left) models with her friends Xiqing Wang/ BBC

Shuishui (first from left) models with her friends

Each has chosen their own traditional Chinese outfit in red or gold - floor-length silk pattern skirts and short jackets lined with fur to keep out the spring chill. These glamorous grannies are modelling for social media.

They teeter precariously in high heels over the cobbled historic Gongchen bridge while trying to smile and laugh for the camera as a team of social media specialists shout instructions.

This is an image of greying gracefully that Shuishui is keen for the world to see, and she feels she is doing what she can to lift an ailing economy.

But this image belies the reality for millions of elderly in China.

Back in Liaoning, the wood smoke rises from chimneys, signalling lunchtime. Mr Cao is stoking the fire in his kitchen to heat water to cook rice.

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