There are few metrics which make it more obvious just how far along China has come than life expectancy-related ones. In the first half of the sixties for example, the average life expectancy at birth in China was well over 50 years, in line with severely under-developed nations. It was only as of 1966 that the 50-year mark was exceeded, 1971 for the 60-year mark to be a relic of the (unpleasant) past and 1996 for the 70-year milestone to be surpassed.
In the spirit of being thorough, the information we are discussing in this article is based on the World Bank data, which itself was gathered from the United Nations Population Division, various national statistical offices, Eurostat, the United Nations Statistical Division, the US Census Bureau International Database and the Secretariat of the Pacific Community.
What were the causes of this low life expectancy?
Simply put, the causes can easily be traced back to economics, with the low life expectancy numbers being to a significant degree explained by the fact that back then, China lacked the basic medical infrastructure to keep highly preventable deaths (deaths related to easily-curable infections, for example) to a minimum. Time and time again, we try to make it clear here on ChinaFund.com that pretty much everything ultimately revolves around economics and that behind the figures we and other experts throw around lie actual people, with real problems and oftentimes tragic destinies.
As China transitioned from an under-developed nation to the world’s #1 economy in nominal terms (even if per capita metrics paint a less optimistic picture), the life expectancy numbers ended up reflecting this new reality, with the average Chinese citizen being expected (at birth) to live almost 76.5 years at this point in time.
While still not impressive compared to let’s say none other than Hong Kong with its 85 value, Japan/Switzerland with 84 and so on, the life expectancy status quo in China doesn’t look terrible at all, being just 2.5 years below that of the United States and for the most part in line with let’s say the life expectancy associated with many European Union nations.
If we are to look at this metric on an aggregate basis, the worldwide life expectancy at birth lies somewhere in the vicinity of 72.4 years at this point in time. As such, it is fairly safe to say that China can be considered reasonably above-average from a life expectancy perspective. Should the authorities be content with this status quo?
Most likely not.
At the end of the day, there are already metrics such as nominal GDP which paint a very dominant picture of China, even metrics pertaining to cutting edge industries such as solar and wind energy (with, in both cases, China being the world’s #1 producer as well as consumer). On the other end of the spectrum, however, there are also metrics China would happily avoid being mentioned, for example the GDP per capita figures which are well below the global average.
In a nutshell: China’s life expectancy situation is not bad at all, but there is still room for improvement.
Finally, it is worth pointing out that as desirable as impressive life expectancy numbers may be, there are economic consequences associate with them. Perhaps a textbook example to this effect is represented by Japan, with its remarkable 84-year life expectancy on the one hand but its equally remarkable in the worst possible sense demographic growth trends on the other. To put it differently, sub-optimal natality correlated with high life expectancy numbers make it clear that a country is dealing with an unsustainable demographic situation. This ultimately puts tremendous pressure on a wide range of systems, from pension systems to various industries.
While not a textbook demographic problem example such as Japan, things are definitely less than ideal in China as well. From the Westernization of China in many respects with repercussions on trends involving natality to problems “inherited” by the current administration such as China’s disastrous one-child policy, it would be severely irresponsible not to pay adequate attention to the very real demographic challenges China is facing.
As a conclusion, however, this is indeed a “first world problem” to use a tongue-in-cheek reference or, if you will, a good problem to have. As China reaches parity with the proverbial West when it comes to a wide range of economic as well as social/cultural indicators, it is to be expected that it will end up having to deal with many of the West’s problems as well and the demographic dimension is clearly in the spotlight.
It is ultimately up to those interested in gaining exposure to Chinese assets how they perceive this issue. Some may choose to see the downside dimension and consider the demographic problems a deterrent, whereas others embrace the exact opposite attitude and look for generational opportunities associated with industries and assets that tackle this problem, for example opportunities in the elderly care field.
As you might have expected, we for the most part choose the latter approach here at ChinaFund.com and see the various challenges a maturing China ends up being confronted with as opportunities to position ourselves properly. Of course, we just as strongly believe in helping our clients do just that. As such, should you have concerns pertaining to demographics, economics or anything else, do not hesitate to reach out by sending us a message through our Contact section. On the other hand, if you (like us) are on the lookout for promising opportunities associated with these challenges, we would be more than happy to embark on this journey together.