BEIJING // China, with the world's largest population, faces some formidable demographic challenges of its own making in a time of impressive economic growth and rapid urbanisation.
Key among the looming problems is the growing gender imbalance caused by a decades-old birth-control policy sustained, at times, with brutal efficiency.
Then there is the rush to the cities and towns by more than 10 million people each year, and the prospect of a population that will age before the country has the means to look after its elderly.
After decades of high birth rates under Mao Zedong, China moved to a one-child policy in 1980. Authorities say that has meant 400 million fewer births, although this figure is contested.
With most urban families limited to a single child and rural families typically limited to two, the birth rate has fallen to an average of about 1.5 for each woman, well below the 2.1 required for the population to sustain itself.
Official figures predict the country's population, now at 1.34 billion, will peak at more than 1.46 billion in 2030, by which time India will have overtaken it as the world's most populous nation.
Limiting birth rates has produced what was recently described as a "demographic time bomb" because the ratio of old to young is increasing quickly.
A decade ago there were six workers for each person over 60 years old. In two decades there will be just two.
"A lot of talk is about the dependency ratio. It's going to be a lot higher … it will probably be a strain to the social-welfare system," said Ben Li, an assistant professor in the department of applied social studies at the City University of Hong Kong.
That strain could be unprecedented because the drop in birth rates was so rapid, in contrast to countries such as the United Kingdom, where birth rates began to fall in the 1800s.
Despite its rapid economic growth, China is ageing before it has time to become a wealthy developed nation with a welfare system to provide security for a growing elderly population that has fewer descendants to provide care.
By the time a quarter of the population is aged above 60, per capita incomes will be just one third of those of a developed western nation, according to one estimate this year.
A rise in the pension age, currently 55 for women and 60 for men, is thought to be likely, and the authorities in cities such as Shanghai have already raised retirement ages.
But by limiting birth rates - even if methods such as enforced sterilisation and abortion are controversial - and by achieving rapid economic growth, China has avoided having the vast pool of disenchanted, unemployed youth of the kind that has driven dissent in the Middle East and North Africa.
The gender imbalance the one-child policy has intensified - there are 118 boys for every 100 girls - has been cited as a possible source of social tensions in the future, with vast numbers of men unable to marry.
China is also having to cope with the speed of urbanisation. Migrant workers are abandoning the countryside in droves for construction, service industry and factory jobs in towns and cities.
This year the urban population overtook the rural population in size, with migrant workers now numbering more than 200 million.
Last year China added 13 million urban residents and even by 2020 the annual urbanisation rate is expected to be as high as 10 million. It is the fastest urbanisation in history.
The financial incentives to move to the cities "are still strong", said Stephen Joske, the director of the Economist Intelligence Unit's China Regional Forecasting Service.
"We certainly see urbanisation continuing," Mr Joske said.
Despite this frenetic rush to the cities, the government has tools to manage the process that would not be available to a less authoritarian regime.
In particular, the hukou system, which limits the provision of government services such as health and education to an area's permanent residents, discourages migration.
This year, the Beijing authorities shut unofficial schools for the children of migrant workers to try to push some of the floating population back to their home provinces.
China's urbanisation has driven the investment-led economic growth that has made the country's economy the world's second largest.
The slowing population growth is already knocking one or two percentage points off GDP growth, said Mr Joske, but "it's not going to stop economic growth".
dbardsley@thenational.ae
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
RESULTS
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Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
Company%20Profile
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Company%20profile
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Fast%20X
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WORLD'S%2010%20HIGHEST%20MOUNTAINS
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Inside%20Out%202
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
Company%20Profile
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The biog:
Languages: Arabic, Farsi, Hindi, basic Russian
Favourite food: Pizza
Best food on the road: rice
Favourite colour: silver
Favourite bike: Gold Wing, Honda
Favourite biking destination: Canada
England squad
Goalkeepers: Jordan Pickford, Nick Pope, Aaron Ramsdale
Defenders: Trent Alexander-Arnold, Conor Coady, Marc Guehi, Reece James, Harry Maguire, Tyrone Mings, Luke Shaw, John Stones, Ben White
Midfielders: Jude Bellingham, Conor Gallagher, Mason Mount, Jordan Henderson, Declan Rice, James Ward-Prowse
Forwards: Tammy Abraham, Phil Foden, Jack Grealish, Harry Kane, Bukayo Saka, Emile Smith Rowe, Raheem Sterling
COMPANY%20PROFILE
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SPECS
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Results
5.30pm Maiden (TB) Dh82,500 (Turf) 1,400m
Winner Spirit Of Light, Clement Lecoeuvre (jockey), Erwan Charpy (trainer)
6.05pm Maiden (TB) Dh82,500 (Dirt) 1,900m
Winner Bright Start, Pat Cosgrave, Saeed bin Suroor
6.40pm Handicap (TB) Dh92,500 (D) 2,000m
Winner Twelfthofneverland, Nathan Crosse, Satish Seemar
7.15pm Handicap (TB) Dh85,000 (T) 1,600m
Winner Imperial Empire, Tadhg O’Shea, Satish Seemar
7.50pm Handicap (TB) Dh92,500 (T) 2,000m
Winner Record Man, Tadhg O’Shea, Satish Seemar
8.25pm Handicap (TB) Dh92,500 (D) 1,600m
Winner Celtic Prince, Fabrice Veron, Rashed Bouresly
SPECS
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COMPANY%20PROFILE%20
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Killing of Qassem Suleimani
Company%20Profile
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
