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China’s Aging Population and the Problems of Old Age Consumption

Author: YuTao
Tutor: WangShengJin
School: Jilin University
Course: Population, Resources and Environmental Economics
Keywords: Aging population elderly consumer consumption theory reasonable expenditure on pensions
CLC: C924.2
Type: PhD thesis
Year: 2013
Downloads: 1661
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China’s GDP has been ranked the world’s second largest economy, there is a larger gapwith the developed countries but also in the quality of economic development and people’sliving standards, China’s economy is facing a critical period of comprehensive restructuring.The21st century, China’s aging population is the rapid development of the economic andsocial under increasingly heavy dependency burden, China’s population and thecoordination of economic and social development is in the "old before getting rich" state.The lack of domestic consumer demand and the aging of the population, the rapiddevelopment of the main challenges facing the current economic and social development inChina, then the coordination of population and sustainable economic and socialdevelopment has become important goal in regulation of China’s economic and socialdevelopment process. This article is based on the reality of China’s population is aging andthe economic and social development, based on the demographic transition theory and theclassical theory of consumption, from theory and empirical research to explore the Chinesepopulation aging and old age consumption, in order to regulatory policy options to providedifferent theoretical perspectives and the fundamental basis for the development process inChina.The core content of this study can be summarized in three aspects.First, study the causes of China’s population is aging, and the development status andfuture trends. China’s aging population is also the inevitable result of changes in thepopulation, family planning policies population mortality and fertility will accelerate thedecline of fertility, as well as the level of economic development is ahead of the arrival ofChina’s aging population, the main causes of the rapid development. The late start, speedthe development of a significant trend of an aging, aging regional differences invertedurban and rural areas, as well as low levels of economic development, old before getting rich, the main features of China’s current development of an aging population. China’sdemographic dividend period will disappear in2015, the population of inertia will lead tothe total population of slow growth in2030, the aging of the Chinese population in thisperiod will be the development of faster, the elderly dependency increasingly heavypressure.Second, the study analyzes China’s consumer conditions and insufficient consumptioncauses, as well as characteristics of the Chinese elderly consumer potential and elderlyconsumer market conditions. The main problems of China’s consumer status quo isseriously inadequate consumption, poor role in boosting economic growth, mainly as thefinal consumption rate and residents continued low propensity to consume. Engelcoefficient from the consumer point of view, the current Chinese urban residents to developenjoyment and consumption of rural residents in the stage of development of enjoymentand consumption gradually increased, the overall level of consumption of urban and ruralresidents is still not high. Consumer serious shortage mainly due to the level of residents’income growth lagged behind economic growth, low income level of the long-term;,housing, medical care and education forward consumer spending accounted for a largeproportion of the consumption structure, inhibition of the residents on consumer demandfor other commodities. Elderly in China due to the physiological, psychological factorsimpact the spending power is usually lower than adults, and elderly Chinese consumermarket is still in the developmental stage, is not perfect, which also caused a seriousshortage of elderly consumer demand. However, with the rapid development of the agingpopulation, the size of the elderly population in the rapid expansion of, elderly consumerdemand has great potential.Finally, analysis of the elderly consumer spending, and study the main driving factorsof elderly Chinese consumer, as well as the rapid development of the aging populationaging reasonable pension expenditure level. Artificial assumption in standard consumer, thecurrent process of population aging in China did not make the standard consumer scalecontinued to decline, and will continue to increase in2040, which means that residentsoverall consumption potential will further continue to expand, the development of specialpopulation aging played a catalytic role. According to the classical theory of consumption, and the development of the actual the elderly effective consumer demand in China ismainly affected by the impact of the national income and expenditure on pensions,embodies the coexistence is home to the Social Security pension mode characteristics.Which pension income is the elderly consumer spending, the main source, it also confirmsthe conclusions of this study, mainly the elderly pension expense to be significantly higherthan the national income elderly marginal propensity to consume marginal propensity toconsume. However, China’s actual level of pension spending significantly below areasonable level of pension expense, the low level of pension payments to reduce theelderly consumption level, affecting the quality of life of older persons. According to theforecast results, combined with the practical point of view of the development of China’sold-age security, the larger issues of pension income level is too low and the elderly incomegap further inhibit the the elderly effective consumer demand to expand.In summary, the response to the aging population and expanding domestic demandshould be based on the actual development of China, and coordinate population andeconomic policies, and the challenges faced in the process of economic and socialdevelopment opportunities. Accordingly, the paper argues that the control policy effortsshould be strengthened from four aspects: First, timely regulation of population policy,reducing the speed of the aging of the population development; transformation of economicdevelopment, the engine of economic growth by external stimulating domestic demanddriven changes; The third is to improve the social pension system, and improve the overallincome level of the elderly, eliminate pension income disparity; foster and accelerate thedevelopment of the older industries, favorable market conditions for older consumption.

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CLC: > Social Sciences > Demographic > Investigation and research of the world population > China's population
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