【latex版】水贴

The economic success of the post-reform China is a modern phenomenon. The rate of growth and the length it has sustained such growth are all unprecedented, making it the envy of the world, both for developing and developed nations. The current global economic crisis did have a negative effect on China as it is heavily dependent on external demand (Bao, Bodvarsson, Hou, & Zhao, 2009, Hou, 2009), but China still will have a growth rate nearing 9.1%.1 However, behind this success there exist numerous pressing issues that await proper attention.

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The rest of the paper is organized as followed. In Section 1, we will paint a grim picture regarding China's ticking time bomb in terms of aging. This will be followed by the discussion of China's health care reform. We will focus on the coverage, but mainly focus on the inadequacies (especially towards the elderly) of the recent reforms, which has brought basic health care to a majority of Chinese in the last decade. In Section 3, we will try to pull together several sources of data to produce some rough computation on the health care cost for the elderly, especially for the very elderly group of 80+. This is followed by a somewhat radical proposal of what we term Self-interest Motivated Health Maintenance (SMHM) scheme to curb the moral hazard issue that universally plagues all health care systems. A short summary will conclude the study.

威武威武~~~

The aging population distribution of China has its roots in the one-child policy which was introduced in 1979.2 Though it was initiated about the same time as when China embarked on its historical Comprehensive Economic Reform, this one-child policy was not a direct part of the reform itself. However, the motivation was still grounded in economics: to maintain a steady labor force while reducing unemployment caused by labor surplus, and to reduce the demand for natural resources to sustain economic growth (Tain, 1983). The policy is controversial both within and outside China because of the manner in which the policy has been implemented, and because of concerns about negative socio-economic consequences. These include forced abortions, and more troubling the reputed female infanticide. Despite these, the one-child policy still enjoys strong support within China.3

Indeed, the official position of the Chinese government is that the one-child policy is a great success in supporting the current economic growth. In addition, the reduction in fertility rate has eased the social burden that is usually associated with overpopulation. What is interesting is the government could have perhaps partially achieved this fertility reduction without the harsh enforcements that has drawn wide criticism. As Schultz and Zeng (1988) found, with the implementation of the contract responsibility system (1979), farmers were able to have more children as they were no longer dependent on the food rationing, but quickly (late 1980s) economic costs and other incentives were already reducing the number of children farmers wanted.

Numerous criticisms against the one-child policy are fairly well known and do not warrant coverage here. From a demographic point of view, two points are of special interest, one is the gender balance issue, and the other is the inevitable accelerated population aging. The latter is our focus, but a brief discussion of the former is perhaps informative. The ratio of male–female at birth is 103:100 upwards to 107:100 among industrialized nations. China exhibited 108:100 in 1981, but quickly worsened as a direct result of the one-child policy. Currently, the gender ratio at birth stands as 119:100,4 which has a host of social instability issues that can be implicated (Hesketh & Xing, 2008). This is the combined result of the one-child policy and the traditional practice of favoring sons as they carry the family name and are expected to take care of their parents. As a side-note, this is fairly common in Asia, for example, Taiwan has a gender ratio at birth of 110:100 (and 108:100 for South Korea).

Now let us turn to the real issue at hand. China's population dependency ratio has fallen to 36.9% in 2009 and has been below 40% since 2005.5 For China, the children dependency ratio (0–14 Population/15–64 Population) is 25.7% currently, and the elderly dependency ratio is 11.2%. In contrast, for the recognized aging Japanese economy, the dependency ratio is 54.1%, with children and elderly dependency ratios at 20.4% and 33.7% (based on WHO statistics), respectively. China, however, will be worse. In fact, as far as the dependency ratio is concerned, China is at the “as good as it gets” stage.

As can be seen from Table 1, China's dependency ratio will start to rise. The children dependency ratio is relatively stable. It is the elderly dependency ratio that will be the root cause. The elderly dependency ratio is projected to rise from the current 11% to 38% by the year 2050. Based on the 2000 Census, China's 60+ population accounts for 10.5%, and is projected to rise to 19.5% in 2025 and 29.9% by 2050. In absolute numbers, this implies an elderly (60+) population will rapidly increase from 129 million in 2000–394 million by 2050; a threefold increase in half a century.

The above are projections based on the 2000 census and a lot has happened since.6 The Chinese government is in the process of discontinuing the one-child policy, but how effective this will be is still uncertain. Technically, less than 40% of the families are affected by the one-child policy, and the one-child policy has a “binding effect” on even less (under 20%).7 Furthermore, casual survey of the young people shows that many do not want more than one child, some even plan to have no children. Even in the best circumstances, the abandonment of the one-child policy will increase the number of young population with no effect of the working age group for over a decade. This will further worsen the dependency ratio as the children dependency ratio will rise. Even when the new added children enter the labor force in the late 2020s, the absolute number of the elderly remains unaffected.