Outsourcing: Another Chapter

I have been reading a lot about the ageing Chinese population and the effect that it is going to have on their economy. Although I have my share of doubts that there is some trouble for China I would still lean on the side that it's not so much of an issue

The reasons I believe are simple:

1. With advent of medical science it would be common for people to work even at a much older age as to what they do now. Not just that people are living longer, they are fit post retirement and hence can and are having a longer working career.

2. The first question to the above point is that the Chinese economy is manufacturing focused so will these people be able to perform the strenuous tasks. Advancement in technology would come to the rescue there, with processes getting automated, machines and robots to assist human beings even the most primitive of the manufacturing industries would change the way they function.

3. China would never be like a Western European nation where there is heavy expenditure on pensions for the old, medical facilities. Of course things would change but never come to the level of countries like Norway or Finland, hence the pressure on the government would be less.

4. As far as the problem of China getting old before it is rich, first the term rich has to be defined. It is a very relative term and also the numbers attached to it would vary from city to city, state to state, country to country. I doubt that masses China or even India would see opulence and extravagant living. That means their maintenance cost would be low

5. India to the rescue - India's population is set to overtake the Chinese by 2030. India has a huge pool of young educated people who are either unemployed or under employed. With literacy levels increasing this talent pool is going to get bigger. It is unfortunate for them that their talent is not utilized. Unlike the earlier times this population is mobile ( even girls) and can fill the void anywhere in the world.

I feel that the problem of ageing Chinese population is a little over blown and the problem that erupted due to the forced change in demographics can be solved by the same way as well, if need be.