Demographic decline has been happening silently over the last decade around the world. Behind the scenes of technological and economic boom and bust lies a rapidly aging population. Low death and birth rates have been at work, particularly in developed countries and regions such as Japan and Europe.
Mortality rates are low for a good reason — everybody loves the notion of long life expectancy without considering that advanced medical technologies merely delay the onset of age-related diseases. According to the World Health Organization, the global life expectancy increased from 66.8 years in 2000 to 73.1 years in 2019 (prior to the COVID-19 pandemic). A snapshot of the demographic pyramid shows fewer people dying. Various censuses show people are dying at a later age than their parents. The overall effect is a greater proportion of gray-haired people thanks to diagnostic and treatment breakthroughs.
Such a scenario would be worth celebrating if not for a concurrently low fertility rate. In developed regions and some developing areas, female empowerment, education, convenient access to effective contraception, a high cost of living, cultural shifts leading to people getting married later in life, and high divorce rates are but a few pivotal factors that lead to fewer babies born year-on-year. In 2023, Hong Kong recorded a fertility rate of 0.75 births per woman, far below 2.1, a number termed the “replacement rate” recognized by public health experts as the level of fertility at which a population replaces itself from one generation to the next. The “baby boomer” generation exemplified how birth rates well above the replacement rate produced opulent workforces and profuse productivity, undergirding pent-up demand for property and consumer goods alongside an economic boom. Yet reaping the demographic dividends comes at a cost. For when our hard-working grandparents age, a painful question remains: Who will bear the brunt of their retirement costs?
A low birth rate and low death rate combined produce fewer taxpayers to support pensioners. The widening rift between these two generations is evident in political elections across North America, Europe, and Japan. Brexit, in which British citizens voted to leave the European Union following a referendum in June 2016, is the epitome of such an ideological tussle. Old rural white males feared that younger Europhiles would overturn their interests. A study published in the American Economic Journal concluded that “each 10 percent increase in the fraction of the population aged 60+ decreased per capita GDP by 5.5 percent. One-third of the reduction arose from slower employment growth; two-thirds due to slower labor productivity growth”. As the idea of demographic decline became more prevalent, so did its resultant downward forces on the economy.
In the Hong Kong Special Administrative Region, the Health Bureau recognizes the urgent need to shift health-seeking behavior. The current hospital-based tertiary health system is no longer sustainable as the number of elderly people increases exponentially. The Primary Healthcare Commission was set up to shift toward a community-based primary health system. Policies are afoot and running against the sands of time before health expenditures as a percentage of GDP becomes overbearing. This was the case in the United States, where the 2023 health expenditures are projected to have grown 7.5 percent and are estimated to account for 19.7 percent of GDP, costing $4.8 trillion and outpacing the GDP growth rate. Numerous health economic researchers agree that the Affordable Care Act, signed into law more than a decade ago, helped slow the growth of healthcare costs while expanding healthcare access to more people in need. In Hong Kong, health access is barely a problem, given the density of health facilities, high-quality service providers, world-renowned medical research institutes, and the Hospital Authority serving as a healthcare safety net for all residents. But an unstoppable surge in healthcare costs remains the elephant in the room.
The economic signs of demographic decline are starting to show. The GDP growth trend in Hong Kong is steadily slowing, in part due to the high interest rates pegged to the US’ and a weakening global economy. Fundamentally, economic engines may not rev as high as they used to, as the rest of the world suffers similarly from demographic decline. Legislative Council members have started contemplating how best to embrace its impact. Developing the silver economy appears to be favorable in many countries. The latest edition of the UBS Billionaire Ambitions Report found that the majority of billionaires who accumulated wealth in the past year did so through inheritance as opposed to entrepreneurship. Rather than saving up and passing on to their children, perhaps using these resources to further their interests could initiate a cascade of economic growth earlier. The New People’s Party has also mooted ideas to boost birth rates, including raising the ceiling for the oocyte storage period from 10 years to 55 years. This progressive policy recommendation created space for academics, medical professionals and interest groups to start a conversation about boosting fertility. Despite various opinions on how helpful egg-freezing is, they all agree that churning out more newborns in Hong Kong is desperately needed.
The author, a medical doctor with a Master of Public Health from Johns Hopkins University, is vice-chairman of the Youth Committee of the New People’s Party. As founding president of the Digital Health Society, he led the COVideo19 initiative and published the Digital Solutions for COVID-19 Response for the Bill & Melinda Gates Foundation.
The views do not necessarily reflect those of China Daily.
