A] Prelude*
* For more information about Asian and general pension systems, feel free to visit our dedicated webpages:
https://expatpensionholland.nl/china-expat-pensions
https://expatpensionholland.nl/global-pillars-systems
https://expatpensionholland.nl/global-investments-risks-0
https://expatpensionholland.nl/global-social-security-coverage
B] The Numbers
By 2050, according to the Asian Development Bank (ADB), one in four people in Asia will be aged over 60. This is a threefold increase compared to 2010. China, the economic powerhouse of the region, is projected to see a decrease of 220 million working-age individuals between 2011 and 2050. Japan’s population is expected to decline by 16 per cent by 2050, with the number of senior citizens living alone predicted to jump by 47 per cent.
This demographic shift has far-reaching implications that demand the immediate attention of policymakers, businesses and citizens. As populations age, countries will face challenges such as increased healthcare costs, reduced labour forces, and potential economic stagnation. These domestic challenges, in turn, will impact foreign policy priorities, military capabilities and regional power dynamics.
Japan, which is already grappling with the challenges of an ageing society, provides a glimpse into the future that other Asian nations may face.
Ageing populations are likely to constrain economic growth, potentially altering the balance of power in the region. China, which has long been projected to surpass the United States as the world’s largest economy, may face hurdles in its ascent due to a shrinking workforce and rising social welfare costs. Alicia Garcia Herrero, a senior research fellow estimates that China’s ageing population could lead to an annual GDP growth reduction of 1.36 per cent from 2035 to 2050. This would result in Chinese economic growth of only 1 per cent by 2035.
The economic slowdown in China could have ripple effects throughout the region and beyond. Countries that have benefited from China’s economic rise, such as goods exporters in Southeast Asia and the European Union, may need to reassess their growth strategies. Furthermore, a financially constrained China might face challenges in funding its ambitious Belt and Road Initiative or modernizing its military at the current pace. This could potentially alter the security dynamics in the Asia-Pacific region.
Japan, which is already grappling with the challenges of an ageing society, provides a glimpse into the future that other Asian nations may face. The phenomenon of “silver democracy“ in the country, where the political influence of older voters has resulted in policies favoring the elderly at the expense of younger generations, could happen elsewhere. This intergenerational tension may shape domestic politics and, consequently, foreign policy priorities across the region.
In South Korea, the rapid pace of ageing is necessitating a re-evaluation of longstanding security arrangements. With a diminishing pool of young men available for mandatory military service, the country may need to explore alternative defence strategies or rely more heavily on technological solutions. This shift could have significant repercussions for the balance of power on the Korean Peninsula and the US military presence in the region.
C] Changes are not uniform
The demographic challenges that Asia is facing are not uniform. While East Asian countries are quickly ageing, some parts of South and Southeast Asia still have relatively young populations. India, the most populous country in the world, has a median age of only 28. India’s young population could potentially position it as a counterbalance to China’s influence in the region, given that they can effectively utilize their workforce.
As the centre of global economic power continues to move eastward, the way Asia navigates its demographic challenges will have far-reaching consequences.
The differences in age demographics across Asia could lead to a rise in migration flows as countries with ageing populations seek to address labour shortages. For example, Japan has already started to relax its traditionally strict immigration policies in order to attract foreign workers. These migration patterns, driven by demographics, might reshape cultural landscapes and create new sources of regional tension or cooperation.
D] The future
Beyond the economic and security implications, the ageing of Asia has significant effects on soft power and cultural influence. Countries with younger populations may be better positioned to drive technological innovation and set cultural trends. For instance, the worldwide popularity of South Korean pop culture, known as “Hallyu”, could decline as the country’s population ages, potentially shifting the centre of cultural influence within Asia.
The intersection of demographics and geopolitics in Asia also has global implications. As the centre of global economic power continues to move eastward, the way Asia navigates its demographic challenges will have far-reaching consequences. Particularly, the United States will need to reassess its strategic approach to the region, taking into consideration not just current power dynamics but also long-term demographic trends.
Climate change adds another layer of complexity to this demographic shift. With extreme weather events becoming more frequent and severe, older populations may be especially vulnerable. This could increase the demand for climate adaptation measures and potentially lead to new migration patterns within and beyond Asia.
E] Finally
The policy choices made today will play a significant role in shaping how countries adapt to these changes. Investments in education, healthcare, and technological innovation can help mitigate some of the challenges posed by ageing populations. Equally important will be fostering social and cultural adaptations to support older workers and promote intergenerational solidarity.