Aging East Asian "tigers" catching up to elderly Japan

At apparently even much quicker rates.

While it is well-known and documented that Japan has one of the oldest populations on the planet--with diapers for the elderly having started to outsell diapers for babies--it has been observed that the rest of the region is catching up, which is not any trivial matter.

According to a research report from HSBC Global Research, with other East

Asian “tigers” (South Korea, Hong Kong, Taiwan & Singapore) are expected to age at rates even quicker than that of Japan.

This is no light matter, because while the Western world had abundant time between industrialising and the start of the ageing process, Asia has less time to adapt.

Here's more from HSBC Global Research:

The consequences are vast, with risks that the relatively poorer countries fall into middle-income trap while the wealthier ones may face stalling or declining income levels.

On top of this, there has been less time for welfare systems to effectively develop as they have in richer nations.

As we will discuss in the following publications, this will be an important determination of future fiscal costs.

East Asian fertility rates are chronically and unsustainably low. In fact, of the 224 countries included in the CIA World Factbook’s 2013 study of total fertility rates (the TFR is the average number of children born to a woman over her lifetime); Korea, Hong Kong, Taiwan, Macau and Singapore occupy the 219th and 221-224th positions, respectively.

Japan’s fertility rate has somewhat ‘improved’ over the past few years, moving into the 208th place with a TFR of 1.39, although this still remains far below the replacement rate of 2.1 for developed countries.

One interesting difference with low fertility in Asia and the West (especially Europe), has been that fertility is low alongside low participation of female in the workforce, above all in Japan and Korea – essentially a double-edged demographic dilemma.

When comparing these Asian numbers with the 2.06 of the United States and 1.58 of the quickly greying European Union, it is clear that much of Asia is in a precarious demographic position.

China’s relatively low fertility of 1.55 is a function of the one-child policy, and the compounding effect it has had over 30 years of strong implementation.

There are now exceptions for a large part of the population, but the 30 years of widespread enforcement is now placing tremendous upward pressure on dependency ratios, since a single working child will likely have to support several elders.

This has the potential to create strong societal pressures were it to go on unchecked by corresponding changes in support systems.

Just late last year, in November 2013, a new exception to the policy was announced – which should apply to couples of whom at least one is an only child.

This should mostly affect middle class urban residents, who will be facing the brunt of the higher living costs in cities and therefore will be quite reluctant to increase family size.

Nonetheless, this recent reform may allow for TFR to increase slightly, which could result in 1-2 million additional births a year over the next few years.

However, this shouldn’t have any meaningful impact on long-term trends given the strong momentum behind China’s ageing process.