Two Superpowers

One Super Aging Problem

China and the United States could not be more different as nations.

China’s form of government is essentially a dictatorship (and I know that political scientists may quibble with that definition so, okay, China is a socialist democracy) while America is a bona fide democracy (for the time being).

In China, power is wielded from the top down – from the Central Committee down through the various local party committees. In America, power comes from both the federal government and state governments via their legislative bodies.

The cultures of the two are unique and share nothing in common, apart from smartphones and a love of social media apps, perhaps.

You get the picture: two vastly different superpowers with vastly different aims, characteristics, histories, and worldviews.

And yet, they are both facing the same two enormous challenges.

One is an aging population and the other is a creaking, strained healthcare system.

Let’s dive into this more. On Thursday, January 16, the New York Times published a story documenting how the Chinese leadership’s efforts to encourage women to have more babies is failing dramatically.

How Policy Can Backfire

When Chairman Mao mandated in the late 1970s that Chinese couples could only have one child (and it better be a boy) because the population was exceeding the ability of the nation’s infrastructure at the time to keep up, little did he know what long-term ramifications lay ahead.

Today, China’s population is declining significantly as a result. And the present government’s efforts to encourage couples – even single women – to have children is not working. The result is dramatic and far reaching.

The Times reports that across China, hospitals are shutting obstetrics wards, kindergartens are closing, baby formula manufacturers are closing plants and thousands of formerly employed Chinese citizens are now out of work.

Combined with an aging population, the declining birth rate means that the Chinese population is shrinking and did so for the third straight year in 2024.

There are several economic aspects that are exacerbating the problem. China’s pension and benefits system is severely underfunded and last year, local governments which are responsible for healthcare in China actually cut healthcare benefits.

There are close links between this problem and the nation’s failed real estate market where property prices have plummeted year after year thanks to massive overspending and overbuilding, combined with skyrocketing debt, all with the blessing of the Central Committee. Local governments reaped enormous profits from the once high-flying real estate economy but the bubble burst in earnest in 2021 and the effects are still being felt four years on.

How The Chinese View Family Today

The average Chinese couple regard the problem of having children thusly: kids are expensive; we have little or no equity in our homes any longer; we have to look after our aging parents; we are enjoying the lifestyle afforded a double income family (remember the DINKS in North America in the 80s?).

Fewer children mean fewer future workers contributing to an underfunded state pension and benefits plan. And in China, healthcare is expensive. This may come as a surprise to those of us who assumed that “healthcare for the people” would be a given. But, in China, you pay out of pocket to visit a doctor, you pay out of pocket to visit a hospital for treatment, you pay for all your drugs on your own tab.

It wasn’t always like that. However, a basic universal healthcare plan was done away with in the early 1980s as China switched to a market-reform economy.

Today, China’s poor, rural dwellers decline visits to physicians due to the high cost. They stay away from hospitals for the same reasons.

So, China is afflicted by a population growing older all the time and needing greater medical care from a system ill-equipped and ill-funded to supply it, a shrinking birth rate and young couples who are refusing to give up the double-income quality of life.

How China and America Share The Same Problem

How on earth, then, could China be similar to the United States?

Firstly, America’s birth rate hit an all-time low in 2023, the result of declines that began back in 1960.

Secondly, the U.S., like China, is experiencing an aging population and with that, a projected doubling in dementia risk by 2060 where it’s predicted new cases will increase by one million each year.

We know that resources for older American adults are stretched; currently, more than six million Americans (10% of the over-65 population) have dementia, at a cost to the public healthcare system of 600 billion dollars a year. Much of the cost for treating dementia in the older population is borne by Medicare and Medicaid, both of which are underfunded and will continue to burn through available funding in the future.

Dementia sufferers, like many other older Americans, can benefit from a geriatric doctor. But here’s the twin issue facing the U.S. now. Geriatricians are in decline, just when they’re needed most and in far greater numbers.

There are 55 million Americans over 65. That number will rise as the population ages further. Currently – right now – there are only about seven thousand geriatricians.

Recent medical school grads are shying away from the specialized discipline of treating older patients. The argument is made that they don’t receive any meaningful exposure to and education around treating older people and form a view that such a specialty might be dull and unrewarding.

Proponents argue that the practice of geriatrics is far less stressful than that of being a primary care physician.

Unfortunately, the profit motive raises its head, here. The average physician – your garden variety family doctor – earns $350,000 a year. That’s the average.

A geriatric doctor earns around $258,000 a year. See the recruiting problem?

How It All Comes Full Circle

It remains to be seen if that salary figure rises. One thing is certain, though, The need for more geriatric doctors is absolutely paramount.

However, like China, the U.S. has a public healthcare system that is grossly underfunded while the demand for its services is growing rapidly. If you’ve got the money in America, you’re golden.

Of course, that’s the 1% we’re talking about, aren’t we?

So, it’s interesting how two superpower nations with no shared language, culture or political aims – avowed enemies, really – have fallen victim to the same problem, namely, demographics and how demographics is squeezing both countries in similar ways while creating nearly identical issues at the same time.