Primary schools become old people’s homes and factories struggle to find staff as population ages
“Sleep well, eat well, that’s all that matters for old people,” said Xiao. The sprightly 75-year-old shares a room with a couple in their 80s in what was once a primary school but, in a stark illustration of China’s demographic crisis, has now been converted into an old people’s home.
A poster on the wall of the Rudong Binshan Elderly Apartments cautions visitors that sticky-rice dumplings are a choking hazard for elderly relatives. The best thing here, said Xiao, is that “you don’t have to cook for yourself”.
In the late 1960s, the county of Rudong, in China’s prosperous eastern Jiangsu province, was so populous that it was chosen to pilot the one-child policy. Nearly 60 years later, it is the country’s oldest county — nearly 39 per cent of its population is aged over 60, more than double the national figure of 18.7 per cent.
As a result, schools have closed and the county’s cotton and rice farms struggle to find workers, while the elderly population subsists on often paltry pensions.
Rudong’s predicament offers a preview of China’s demographic challenge, which in its scale and speed promises to eclipse similar crises in other countries such as Japan and Italy. Last month, India unseated China as the world’s most populous country, according to a UN study. This came after China’s population shrank last year for the first time since the 1960s.
For Beijing, the demographic crisis will require painful reforms to a growth model that has turned China into the world’s second-largest economy, including diverting spending from infrastructure and property towards pensions and healthcare and trying to find younger workers for factories. It will also need to address severe inequality in the pension system, in which many urban residents receive far higher allowances than most migrant workers and rural residents.
“Population development is a vital issue,” President Xi Jinping told top-level cadres this month. He stressed the party’s new motto of “high-quality development of the population”, which underlines the need for better childcare and education and lowering the burden of raising families.
“What you see in Rudong is only the beginning,” said Huang Wenzheng, a senior fellow at the Center for China and Globalization. “Rudong may one day become a ghost city.”
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When the one-child policy was introduced, people hoped it would help alleviate poverty in Rudong’s densely packed village houses by reducing the number of mouths to feed.
“Nobody had anything to eat in the 1960s,” said Wu Aiping, an entrepreneur who runs another aged care facility, the Huayuantouju Elderly Care Home, in Rudong.
Over time, the one-child policy took root and family size declined. By the 1980s, as China’s economy grew, young people also began leaving Rudong for more lucrative jobs in Shanghai and other eastern cities.
In 2016, China finally abandoned the one-child policy as fertility rates plunged. But it was already too late for Rudong. In the decade ending 2020, the county’s population declined nearly 12 per cent to about 880,000 people. Its 2022 disposable income of Rmb43,645 ($6,315) a head, while high compared with the rest of China, lags behind the rest of Jiangsu by more than 12 per cent.
The elderly are even more impoverished. Many older people in Rudong say their pensions are Rmb300 or less a month. While they say it is not enough, it still exceeds what the IMF said in 2021 was the average monthly rural pension benefit payment of Rmb170. This is below the absolute rural poverty line of Rmb192 per month set by the central government.
Most poor elderly rural residents are reluctant to ask their children for money due to China’s rising cost of living. Because of the one-child policy, some young couples have to care for up to eight grandparents and four parents in addition to their own offspring.
As a result, many older people eke out a living in any way possible. Under the shadow of the pagoda of Rudong’s 1,200-year-old Guoqing Temple, a 77-year-old incense seller said she received a tiny pension from the state but worked because she did not want to be a “burden” on her son.
A 64-year-old tricycle rider said he was now too old to do his former trade of carpentry. “Nobody wants me,” he said.
Elderly farmers are still visible in the fields around Rudong. “It’s good for these old people to work,” said the supervisor of a work party of 70-plus-year-olds. They were hoeing a field planted with onions and being paid Rmb8 an hour. “If they stay at home, they get sick quickly,” the supervisor added.
Many employers and local authorities hope to attract younger workers for what the government says will be Rudong’s “dynamic decade”, but they are in short supply. As a result, they offer incentives — everything from higher salaries to subsidised housing.
A poster in a labour exchange advertising work at one of Rudong’s factories, a plant run by Irish food, beverage and pharmaceuticals group Kerry, says younger male workers can apply for machine operator jobs with a monthly salary of Rmb6,500 or more. This compares with Rmb5,800 offered to unskilled male workers aged 40-55.
At a new housing development in the city, sales agents said the local government offered discounts for homebuyers who had a doctorate, masters degree or technical qualifications, or were families with two children.
These local incentives are echoed at a national level.
One government agency has launched pilot projects in 20 cities to build a “new era of marriage culture” to “encourage childbearing”, state media reported. Beijing has also announced initiatives cracking down on dowries and extravagant weddings to lower the cost of marriage.
Some cities are handing out cash payments for families that have a third child, while others are expanding maternity and paternity leave. Many are subsidising fertility assistance programmes such as in vitro fertilisation under national insurance programmes.
But analysts question if piecemeal initiatives will be enough to protect China’s economy from the demographic decline, which some anticipate could reduce gross domestic product growth by one percentage point a year until 2035.
At the current rate, China will have only one worker for every retiree by the century’s end, compared with four today, said Bert Hofman, director of the East Asian Institute at the National University of Singapore.
To offset this, the government needs to gradually incentivise people to work beyond the current retirement age, which is 50 for women and 60 for men, and to encourage further migration of its still-large rural population to more productive urban jobs, according to Hofman.
Policymakers also need to expand private pensions and upgrade the health sector. “You need a comprehensive reform package that brings all these things together,” Hofman said.
Until such reforms are realised, semi-rural counties such as Rudong will struggle to care for their elderly.
Entrepreneur Wu said her Huayuantouju Elderly Care Home stayed afloat by attracting residents from surrounding cities such as Shanghai and Nanjing who have bigger pensions.
Showing visitors around the home, whose modest rooms are decorated with portraits of President Xi and first lady Peng Liyuan, Wu said she wanted to build an extension on a neighbouring piece of farmland. “There’s no shortage of demand,” said Wu.
Still, even her business is struggling to operate because of staff shortages caused by the demographic decline. “It’s too low a job for young people these days to help old people take a bath,” she said.