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Ageing societies: a race against time
Aggregated Source: China Challenges

Rafal Chomik and John Piggott write:

A large proportion of Asian countries are currently at the top of the working-age population hump. For them, the window of opportunity to prepare for an older population will close within the next decade. Thereafter population ageing is likely to hold back economic growth — something the Chinese government is acutely aware of, referring to population ageing explicitly when it lowered China’s GDP growth target in 2012 to a seven-year low of 7.5 per cent. Future growth will rely more heavily on higher productivity as urbanisation drives farmers to factories, and as technology and education raise the efficiency of existing urban (and rural) workers.

A key difference between advanced countries and the emerging Asian nations, and one that makes it all the more important to capitalise on the demographic dividend, is that the speed of Asia’s demographic transition means that many countries risk growing old before getting rich.

So how can Asian countries take advantage of this window of opportunity? They can start by reforming retirement income provision systems, especially given the retreat of family support. In this regard, four key lessons can be learned from the mistakes and successes of advanced economies.

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