Population Ageing, Domestic Consumption and Future Economic Growth in China

    Introduction
    In the newly released Twelfth Five-Year Plan (2011–15), increasing the role of domestic demand as a driver of economic growth is identified as one of China’s major priorities in the years ahead. According to the most recent statistics from the National Bureau of Statistics (NBS), final consumption accounted for 48 per cent of gross domestic product (GDP) in 2009, which included 35 percentage points from household consumption. In most industrialised countries, consumption accounts for more than two-thirds of GDP, and the share of government consumption in final consumption is not as high as in China either.Given that the Chinese Government has already had in place for many years the specific goal of raising household consumption, it seems clear that this is neither an easy task nor one that can be accomplished in the short term.
    More seriously, as a middle-income country, China has already entered a period of population ageing. According to the Sixth Population Census, conducted in 2010 (NBS 2011), people aged sixty and above accounted for 13 per cent of the total population, while the share of people aged sixty-five and above was 9 per cent. Compared with the Fifth Census, the above two shares increased 3 and 2 percentage points, respectively. This has placed China in a uniquely challenging position—with the process of ageing occurring far earlier in its development than has been the experience in the industrialised world.
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    ( in Rising China : global challenges and opportunities / edited by Ligang Song and Jane Golley ，2011 )