The Chinese Government Knows Exactly How To Handle The Demographic Crisis

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An emblem of the Communist Party of China (CPC) is seen on the Tiananmen Square on June 30, 2011 in Beijing, China. This year’s celebrations will mark the 90th anniversary of the founding of the CPC. (Photo by Feng Li/Getty Images)

[credit provider=”Feng Li / Getty Images”]

China is mulling over a rise in the retirement age, and while that news itself is significant given PRC demographic trends, I find the nature of the debate itself quite a contrast to the U.S. I’ve been finding many, many common U.S.-China themes for my occasional series “They Got the Same Shit Here That We Got There,” but on this issue, the differences outweigh the similarities.The news here is wonky and sleep-inducing:

China is facing a timebomb of ageing population, with a sharp rise in those over age 65, the proportion of which stands at 8.2 per cent now, and is expected to rise to 30 per cent by 2064.

China’s social insurance management agency said Tuesday that it would propose a rise of legal pension age in time, as an increase in the retirement age becomes more evitable in an ageing society.

News coverage includes lots of statistics (of course) and declaratory statements about the need to reform the system to address obvious, and inevitable, problems. No histrionics, no ideological struggles, a complex issue discussed fairly rationally. And once a decision has been made, implementation will proceed without too much fuss, aside from an occasional mass incident involving angry retirees.

Admittedly, the Party is really good at taking the drama out of these types of policy discussions. Whatever disagreements there are between social insurance apparatchiks in the government, you won’t see these disagreements played out in the newspapers, or at least not much.

In the U.S., which has a much more manageable demographic problem (but a far more scary health care cost timebomb), ideology is getting in the way. One party doesn’t want to even discuss entitlement reform because they worry it is a first step in dismantling the entire system. Why do they think that? Because the other party keeps admitting it. Moreover, many U.S. politicos wonder why they should even allow something like a rise in the retirement age when there remain many other solutions to fix future budgetary shortfalls, particularly when it comes to health care cost containment.

In China, the real debate is indoors, while the public face on the issue is boring and wonky. In the U.S., politicians talk about the “debt apocalypse” or predict that after slashing benefits, Grandma will have to eat cat food to make ends meet; the result is  a refusal to address the underlying problems.

Everyone has their own opinion about which system is better. You and I are well aware of the pros and cons of each nation’s political system. At the end of the day, though, it looks like China will move ahead with reform and the U.S. will just keeping talking about it for another couple of decades.

At least on this issue, I guess I’m with Tom Friedman.

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Post tags: retirement age, social insurance

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