Chinas difficulties concerning an aging society

These days China has a median age of 33 years, which is expected to rise to 45 years by 2050, according to George Magnus - UBS senior economist. I don't have to mention that this development provides some difficulties. Firstly we'll have a look at a policy which mainly created these circumstances.

One-child policy

Introduced in 1980  it was believed that the chinese population was growing at an unsustainable rate. The policy created an extreme ratio of about 120 boys for every 100 girls. Furthermore the steep rise in old age groups can be  ascribed to this policy. In 2007 the National Population and Family Planning Commission (wtf? :P) stated the policy got defused. Likewise parents who are single children can get more than one child. Even if there is some development it is still like that, that couples with one child get a certificate, which entitles them to benefits such as cash bonuses, longer maternity leave and so on...

Main problems

• From 2015 on the working age population is expected to decrease by an overall of 140 million by 2050. 
• Cheap labor is mostly provided by young women and men growing up in rural regions. These labor forces are dedicated to fall in the next years. Alone in the last 3 years wages payed to rural migrant rose by more than 12 percent a year which could lead to a significant rise in inflation numbers. 
• This development worsen the impacts of the aging population and therefore China's growth rate may not sustain at recent elevated levels.

Summarising China will be one of the countries who really need to spend a thought about demographical developments, such as like the absolut abandon of the one-child policy.

What is exactly happening with Citigroup?

I found an interessting article about preffered and common stocks. Have a look by yourself:

http://baselinescenario.com/2009/02/24/tangible-common-equity-for-beginners/#more-2683

sit back, read and relax: Some support by this music link

Demographic issues

Recently i have started reading a book called "The Age of Aging" by George Magnus. He states some interessting facts about human developments in various areas of the world.

The main problem

The main problem is that the working-age population is decreasing heavily especially in developed countries. The problem can be reduced by the following possibilities:

• increase in the official age of retirement
• higher participation from older generations and women
• higher immigration rates.

These three possibilities need to work together because the effect of a single one may not be enough. As an example, to stop the declining working-age population in Japan the retirement age should need to rise by 10 to 12 years from actually 64. Well that would be 76 and we would be higher then back in 1920 in the US when the retirement age was 72, compared to an average life expectancy of 58 years in the same year. This isn't really what one should call progress.

Women to work

An interessting point about the female participation rate is, that it is not negatively correlated with the fertility rate. Whereas the female participation rate is really low in Russia, Japan, Eastern Europe, Italy it is really high in the scandinavian countries as well as in the United States and in Ireland.

Normally you would think that the more women goes to work, the less women have children. By looking at the high fertility rates in the Scandinavian countries, Ireland and the United States this assumption proves to be wrong.

Possible solutions

Two possible solutions to get more women to work were presented by Michaela Meier of PWC in the FuW 18.02.09.

• Spending on childcare should be offered for free. Nowadays in some regions you can deduct childcare from your taxable income, this is also a solution but it mostly favour the richer part of the society.
• The second thought of her is even more interessting. Providing a tax free period of 2 years after a birth if the women will return to work after her maternity leave.

Well... please share your thoughts about this possibilities