Teaching Comparative

Policy dilemmas in China

As if the growing gap between rich (i.e. educated and urban) and poor (i.e. uneducated and rural) in China weren't a big enough problem, Howard French, writing in the New York Times reminds us of other challenges for the Chinese policy makers. What's a good Chinese Communist to do? The policy makers are caught between a rock of demographics and a hard place of economic restructuring.

On the other hand, what's a good capitalist to do? The UK has its own version of this problem. Russia, has a different problem: a declining life expectantcy.

Is there material for a comparative case study here?

China Scrambles for Stability as Its Workers Age

"The proportion of people 60 and older is growing faster in China than in any other major country, with the number of retirees set to double between 2005 and 2015... By midcentury... roughly 430 million people — about a third of the population — will be retirees.

"That increase will place enormous demands on the country’s finances and could threaten the underpinnings of the Chinese economy...

"Under the current two-tiered system, the retirement age for blue-collar urban workers is 50 for women and 55 for men, while for higher-grade professionals and government workers it is 55 for women and 60 for men. Obviously, raising the retirement ages would ease a substantial amount of pressure on the pension system. But there are no plans to do so, and raising the retirement ages would present another set of problems for the government, experts here say.

"Last year, for example, 4.13 million young Chinese graduated from universities, and fully 30 percent of them are still unemployed. Unemployment is high among those who are not university graduates, as well. Prolonging employment for older workers would make this predicament worse, possibly with volatile consequences.

"Breaking a lifelong promise and abruptly extending the retirement age would create another large class of malcontents..."

Labels: China, demographics, economics, policy

posted by Ken Wedding @ 8:19 AM