China's population: US$970 billion 'silver economy' key to overcoming pyramid paradox

„This will significantly raise the possibility of economic growth deficits.”

China's demographic challenges, including falling birthrates, rapid aging, a pension crisis, labor shortages and a silver economy, will be among the main topics of the „two-session” annual parliamentary sessions that begin next week.

A global trend is for older people to reduce their spending power, but Cai warned that the world's second-largest economy is witnessing an unprecedented era of „getting old before getting rich”.

According to a 2016 CASS survey of six Chinese cities, the average spending power of the 60-65 age group was two-thirds of the peak level seen in the 20-25 age group. Meanwhile, the figures for the 80-85 age group peak at just 46 percent.

Weak demand, slowing pace, and declining productivity are three of the weaknesses seen in China's economic growth.

„The silver economy is central to addressing the aging-related demands of improving the welfare of the elderly and meeting their needs, a key strategy in overcoming the population pyramid paradox,” Cai added.

„Age-related consumption and investment demands should guide domestic demand to expand further.”

To stimulate seniors' purchasing power and unlock the potential of the silver economy, the government should increase income levels and improve social welfare for the elderly through economic and social policy reforms, Cai said.

On the supply side, he called for support measures for the elderly and age-related industries, such as financial subsidies and other policy incentives, to reduce the time frame for building capacity, industrial chains and supply chains.

He added that industrial policies related to the silver economy should adopt a „forward-looking” approach, leading technological innovation in addressing current and future aging-related needs.

They should also aim to ensure that productivity gains translate into concrete benefits for the aging population.

Beijing released guidelines for boosting the silver economy in January, but many analysts urged immediate action.

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Sun Jie, a professor at the University of International Business and Economics in Beijing, told state broadcaster CCTV that he plans to present a plan in two sessions next week urging more government subsidies to rehabilitate public and housing facilities for senior citizens.

Sun is a member of China's top political advisory body, the Chinese People's Political Consultative Conference.

The previous government's target was to help two million elderly households renovate their living arrangements for comfort between 2021-25.

Hu Zhuquan, a researcher at the State Information Center, a government think tank under the National Development and Reform Commission, said China's silver economy is worth 7 trillion yuan (US$972 billion), or 6 percent of national gross domestic product (GDP). )

He told state media late last month that he expects this to rise to about 30 trillion yuan, or 10 percent of GDP, by 2035.