BEIJING: China’s economic engine is losing momentum as the legacy of its decades-old One-Child Policy catches up with it. A rapidly shrinking young workforce and a fast-growing elderly population have pushed the country’s pension system into serious strain, according to the source report.
To address the funding shortfall, the government has raised the retirement age for the first time in 75 years. The move has drawn public discontent on social media, particularly from unemployed young people.
China officially puts its population at about 1.4 billion, but several demographers say the real figure is no higher than 1.27 billion. The country built its role as the world’s factory on cheap labour, and the report says some factories now struggle to find young workers. Weaker demand and a shrinking domestic market are pulling down GDP growth.
China’s slowdown is affecting global markets. The report says oil demand from China has fallen significantly as factories and production slow, and that weaker worldwide demand is gradually pushing crude prices lower.
For India, which relies on imports for more than 85 percent of its oil needs, lower crude prices could reduce the import burden and give more room to keep inflation in check.