An employee shows a senior how to collect a pension via a mobile phone app in Hefei, Anhui province in 2019. [Photo by Ge Yinian/for China Daily]
For a long time, human beings have been too busy studying technologies－5G, internet of things, intelligence－and their influence on economy and society to notice what is changing right under their nose. A new crisis appears imminent, and it is not the side-effects of runaway technologies but the growing number of the old and the decline in the number of newborns.
Almost all the countries are aging. In 1990, populations older than 65 contributed 6 percent of total population worldwide, which surged to 9 percent in 2019 and is expected to reach 16 percent in 2050, data from the Population Division of the UN Department of Economic and Social Affairs showed.
The number of senior people aged over 80 is estimated to increase from 54 million in 1990 and 143 million last year to 426 million in 2050 and 881 million in 2100.
At the same time, many countries have seen fewer newborn babies over the last several decades. About half of people in the world live in countries where the fertility rate is less than 2.1 live-born babies per woman, which means population size in those countries is shrinking.
Though the world population is still growing, the growth rate slows down year by year. The population of 55 countries and regions is expected to drop by at least 1 percent from 2019 to 2050, data from the UN division showed. By the end of this century, the world population may stop growing, to stay around 10.9 billion.
The longevity era appears to raise challenges that need to be cashed in on.
Lower fertility rate, lower mortality rate and longer life expectancy－these are the factors human society will deal with in the foreseeable future.
Looking back at the evolutionary history of mankind, average life expectancy has increased from merely over 20 in the Stone Age to about 40 in the Agricultural Civilization Age, to over 72 in 2019.
Thanks to the development of public health system and modern medicine, plagues and infections have been well controlled, so as to have a largely prolonged life.
Data from the United Nations Population Division showed average life expectancy of world population rose by 8.4 years from 1990 to 2019, and is expected to reach 77.1 in 2050.
Human beings are welcoming the longevity era, which will make a fundamental impact on the current economy, politics and social security system. The traditional mode of "study, work and retire" may be overturned, to confront new challenges in re-employment, wealth management and health maintenance.
Where there is a demand, there is a business.
Total expenditure on health in the United States is almost 18 percent of its gross domestic product. More than 16 percent of its population is aged over 65, who contribute 36 percent of health expenditure, according to Peterson-KFF Health System Tracker, which monitors the US healthcare system.
'Big Health', which includes medicine, medical equipment, drug distribution and health-related services, is the biggest industry.
The US has 15 Fortune Global 500 companies in Big Heath, while China only has two. Total expenditure on health accounts for only 6.4 percent of GDP in China.
Despite the fact that China's economy relies much on real estate and automobiles, the future pillar industry is very likely to be the health sector, as the country is aging faster than the world's average.
China had 167 million people, or almost 12 percent of the total population, older than 65 in 2018, data from the National Bureau of Statistics showed.
According to a UN forecast, China's population will reach its peak in 2030 at around 1.45 billion, but the elderly group will continue expanding. The number and proportion of Chinese who are 65 and above are expected to reach 370 million and 26 percent in 2050, respectively.
From 1990 to 2017, the top five most fatal diseases to strike Chinese people had changed from acute diseases like infection to chronic disease like cardiovascular and cerebrovascular diseases, tumor and degenerative disease. The advances in medical technologies have helped prolong life of patients with chronic disease, which also contributed to the aging population.
The growing concern for health among the public will provide more opportunities for companies that can offer them solutions for a healthy life. According to the Healthy China 2030 agenda, the scale of Chinese health service industry is expected to surpass 8 trillion yuan ($1.16 trillion) in 2020 and 16 trillion yuan in 2030.
For people, the message seems to be this: Take care of your money before it's too late.
With the growth of retired people and reduction of new labor force, the government will face heightened pressure to balance the growing burden of elderly care with the decrease in new fiscal revenue.
So reliance on the government alone to finance your long retired life may prove unsustainable. Instead, individuals need to go in for new support systems like the capital market or wealth management firms to take care of their assets.
Now, 70 percent of the wealth of Chinese people is in non-financial assets, which are in most cases linked to real estate, while in the US, financial assets account for 45 percent of a person's wealth, and property is less than one-third, data from the National Bureau of Statistics and financial data provider Wind Info showed.
The government's latest policy on real estate could spur a trend among residents to shift their wealth from property to financial assets. The returns on such investments are expected to increase income of the retired. They will also help stimulate the economy.
In terms of related business, whoever succeeds in preserving or increasing the value of pensions of the Chinese people will likely emerge as a world-class wealth management giant.
The huge elderly group with abundant assets and time on their hands will create huge demand for a variety of products, including financial products, and services. Longer life expectancy and improvement in life quality will stoke more consumption. The progress of modern medical science keeps expanding the connotation of health and wellness from the physical level to the emotional, psychological, social, moral and spiritual realms, to boost health-related consumption.
If we see longevity as a social pattern, businesses relating to health and wealth will form a distinctive economic model that will differ from the current one, and will dominate the world economy for a long time.
Chen Dongsheng is chairman and CEO of Taikang Insurance Group.