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In its quarterly examination of the economic outlook for the world’s major economies, the Conference Board of Canada identifies rapidly aging populations coupled with well-below-replacement-level birth rates in the Asia-Pacific region as indicators that the once powerful economies of these countries are headed toward economic collapse.

“Productivity gains and a large, young working-age population have done much to boost Asian economic growth over the past three decades. But Asia’s demographic dividend is quickly coming to an end. Due to fewer births and longer life expectancies, the average age of the population in Asia is increasing rapidly,” says Kip Beckman, principal economist and author of the Conference Board’s World Outlook-Spring 2013.

Beckman points to Japan as an example of what will soon happen in China due to its impending population crash.

Japan, says Beckman, has already arrived at the point of no return to which China is headed.

While seven per cent of the population of China, Hong Kong and Taiwan is 65 years or older today, in Japan that demographic has increased to 23 per cent, Beckman says.

By 2035, the median age in China will increase from 35 to 45 – equal to Japan’s current median age.

Beckman notes that this demographic shift is especially prevalent in China due in part to the country’s one-child policy.

The low birth rate due to the one-child policy is exacerbated, he suggests, by other factors that include a massive gender imbalance in the country because of sex-selective abortion.

An analysis of sex-selective abortion in China and other East Asian countries by Dr. Therese Hesketh of the UCL Centre for International Health and Development found significant societal repercussions of the practice that went beyond economic considerations.

According to Hesketh, these include increased violence and crime due to a 10% to 20% imbalance between the number of males and females born in these countries.

Human rights activist Reggie Littlejohn of Women’s Rights Without Frontiers said that according to a 2009 study published in the British Medical Journal the average birth ratio in China is 120 boys for every hundred girls born.

“But for second births in certain areas that allow a two-child limit under strict conditions, that number jumps to 146 boys for every hundred girls. In two provinces, Jiangsu and Anhui, for the second child, there were 190 boys for every hundred girls born” Littlejohn said.

The Conference Board of Canada’s analysis of China’s demographic time bomb says that Asian governments are not prepared to handle the consequences of a collapsed birth rate and a rapidly aging population.

“Since children have traditionally looked after their aging parents, governments have invested sparingly in pensions for older citizens,” says Beckman.

Solutions to the demographic and consequent economic collapse in China that the Conference Board suggests are increased investment in education and support for working women, as well as to encourage immigration, though it recognizes there is little incentive for immigration to these countries.

“Future economic growth in the region will depend more on productivity gains than on a large support of low-cost labor. Investment in education (to enhance productivity) and support for working parents (mothers, in particular) would help to maintain robust growth – which will also generate the resources to support an aging population. In addition, Asian governments must weigh prevailing nationalist and cultural sentiments with the need to replenish their populations, and may have to consider more open immigration policies than currently exist in the region,” the Conference Board states.

An apparent contradiction presents itself in the Conference Board’s recommendation, however, due to its statement that the low birth rate among Chinese women is in part due to better education.

“Women in Asia have become better educated, making them more financially independent and less likely to rush into marriage at a young age,” the Board notes.

The Conference Board of Canada’s World Outlook-Spring 2013 report is available.

[Thaddeus Baklinski May 15, 2013, OTTAWA, ]