China: the demographic crisis is forcing kindergartens to become homes for the elderly

Births in China have followed a drastic downward trend since the government implemented the one-child policy in the early 1980s. While it is true that this policy was being changed, that did not immediately impact the cultural trend; on the contrary, between 2021 and 2023, the number of children in preschool education fell by almost 15%, to just under 41 million.

Not surprisingly, then, preschools experienced a steady decline in attendance, highlighted in a CNBC media report based on data from China's Ministry of Education. But while the preschool industry suffers, the elderly care industry is increasingly in demand. But this is just one example of how the demographic crisis is affecting the country.

Indeed, the so-called "silver economy" is a sector that is flourishing in the demand for senior goods and services and this trend will continue to deepen given that by 2040, about 30% of the total population will be over 65.

The CCP government tries to portray this situation as a development opportunity by saying that this is a financially stronger social sector, and that the retired population has more money to spend, but this is a worrying fact. Beijing is trying to mitigate the effects of its aging population crisis, which in the long term may devastate the funding of its pensions, security and defense, health and overall economy.

China's Ministry of Civil Affairs issued guidance on "Silver Age Action" to urge retired citizens who have worked in education, science and agriculture to volunteer for programs aimed at boosting growth in underdeveloped regions. Recently, a plan to gradually raise the retirement age to avoid shrinking the labor force was also approved. By 2040, China aims to raise the retirement age for all men from the current 60 to 63, and for women from 55 to 58. These ages are still lower than those in the United States or Japan, so they do not seem remotely sufficient to alleviate the problem.