Tuesday, November 28, 2023

From Tokyo to Beijing, getting old is hard to do

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Some time later this month, Japan will release the first estimate of births and deaths in 2020 – an annual gift from the Ministry of Health that arrives around December 25 with all the seasonal glee of a broken boiler.

For the spent 13 years, this publication provided evidence of Japan’s dwindling indigenous population and increasingly grim demographic shadow via a series of grim milestones. These seem all the harder on their stubborn resistance to remedy and for the cautionary roadmap, they provide the outside world.

In 2008 – a year after the big shift from growth to decline – deaths in Japan were just over 50,000 births. By 2019, this imbalance had increased tenfold to more than half a million. In 2016, the population declined at an average rate of 1,000 people per day. Based on monthly issues, 2020 is on the path to a possible withdrawal rate equivalent to 1,500 per day, or one person per minute.

According to tradition, the Japanese media will greet this by gathering experts to shake their heads and wring their hands. But for Japanese viewers young and old, this is dismal non-news. They might not like it, but the people, whose popular books include Receiving nursing care, has already achieved a bitter peace with reality. The audience that really matters – in a country or birth rates fell to a 70-year low in 2019 and senior officials often point to “warning lines” on fertility rates – that’s China.

The question for Beijing is not how to be worried, but rather when the weight of demographic worry is felt. On the road to an aging and declining population, there are moments of unexpected benefit: the job rate among applicants in Japan, for example, has remained above 1.0 this year, despite Covid -19. Yet an elderly population has nothing to hope for. There are also significant differences in what brought the two countries to their demographic present: China 1979 one-child policy is the first among them. Even so, the experience of Japan is instructive.

The latest figures from the Japanese Ministry of Health will confirm a phenomenon whose effects are now evident but which have been the subject of alert for more than a quarter of a century. From giant typefaces on menus to empty schools razed to build retirement homes, everyday life is replete with mundane examples where the physical fabric of Japan is changing. Businesses, families and the public sector must adapt to have nearly 29% of the population over 65 and a constantly shrinking workforce to support them. Changes in the macroeconomic fabric – such as a historic rebalancing of risk by pension funds or a surge in overseas acquisitions – can also reverberate globally.

For China, where the over 65 ratio was 11.9% in 2019, a demographic destiny Japanese style may seem distant. But China’s ratio is growing faster than in Japan, and some projections suggest it will reach 25 percent in about 15 years. The critical still-birth crossing that Japan experienced in 2007 will, according to current projections, occur in China within a decade.

The lesson from Japan is that the real danger lies in the expectation of pain. In the more than 30 years since the stock market burst and the housing bubble in Japan, a specter of theories about the economic landscape has developed as a result: for some, a half-baked flirtation. with the recovery; for others, a decline reasonably managed with dignity.

It is less doubtful that since then there has never been a real sense that Japan will sustainably regain the optimism and euphoria that once acted as a powerful propellant on the country. The last few days have reminded us of this. Any celebration of the Nikkei 225 stock index hitting a 29-year high last week has been tempered by the fact that it is still a third below the 1989 high. There are many reasons for this, but demographics is surely central: once the idea of ​​population decline is inexorable, it is difficult to look at the economic horizon and see, as Japan once did, an endless possibility.

Japan’s fertility rate fell to 1.5 the year after the bubble burst in 1990; five years later, the working age population started to decline. In 1997, demographers predicted that the crossover to overall population decline would occur a decade later – as it duly did. China faces a series of similar milestones over the next 30 years. The double challenge is not only to prepare the economy for the practical effects of declining and aging populations, but also to find ways to be optimistic in their shadow.



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