Research on the Impact of China’s Population Aging on Residents’ Consumption

Citation

Xu, Yan. (2019). Research on the Impact of China’s Population Aging on Residents’ Consumption. (Independent study, Master of Business Administration). Bangkok: Siam University.

Abstract

With the increasing economic and social development today, ageing population has existed in all countries worldwide and has become an irreversible trend in the 21st century. In 2016, China’s elderly population over 65 years old had exceeded 150 million. As of the end of 2017, the number of people aged 65 and up surpassed 158.31 million, accounting for 11.4% of the total population. China has become the country with the largest number of elderly people in the world. According to surveys and studies, the number of people aged 65 and over in China has been increasing steadily in the past decade. In 2008, the year-on-year growth rate was 3.0%, while in 2017, the year-on-year growth rate had soared to 5.5%. China’s national conditions are still in a lengthy primary stage of socialism，the economic foundation is relatively weak, productivity is not very developed. With this history, China’s ageing population has shown its characteristics: “not rich,” Minority”, large base, fast speed, etc. Therefore, the continuous growth of the number of older adults in China will harm China’s overall economic development.

In recent years, China’s economic development momentum has been excellent. From 2013 to 2016, China’s average annual growth rate was 7.2%, which was relatively high compared with the world average growth rate (2.5%) and other developing countries (4%) over the same period. This shows that China’s economic strength was gradually increasing. In the past three decades, China’s final consumption rate curve has shown a “U-shaped”; where, the consumption rate is relatively high at first, decreases, and rises again. It was only more than 40% when the consumption rate was the lowest. It slowly began to rebound in 2016; for example, the final consumption rate in 2016 has risen to 53.6%. From the perspective of China’s economic development in the past thirty years, although consumption has also promoted economic progress, it was far from enough.

Based on the authors’ literature research, the theoretical basis of the research in this article is elaborated. Then the population ageing and residents’ consumption situation facing China at the present stage are separately stated, and their characteristics and future development trends are briefly summarized. Secondly, a simple model is used to make an empirical analysis of the relationship between ageing population and residents’ consumption, and it is concluded that aging population will have a negative impact on Chinese residents’ consumption, and use the gray correlation degree to analyze the impact of China’s ageing population on various consumption structures of residents.

Keywords: Aging Population,  Resident Consumption Level,  Resident Consumption Structure,  Old Age Dependency Ratio.

Research on the Impact of China’s Population Aging on Residents’ Consumption

Master of Business Administration (International Program), Siam University, Bangkok, Thailand

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