Is democracy heading toward a depression? CDDRL Director Larry Diamond answers in a recent Foreign Policy piece, assessing the challenges of overcoming a global, decade-long democratic recession. With much of the world losing faith in the model of liberal democracy, Diamond believes the key to setting democracy back on track involves heavy reform in America, serious crackdowns on corruption, and a reassessment of how the West approaches its support for democratic development abroad. 

Perception can often trump facts in politics, and the topic of security in East Asia isn’t exempt from this reality, exemplified by the dominance of China’s “rise” and Japan’s  “ramped up” defense posture in current policy debates. Yet, those dynamics create a need as well as an opportunity for increased multilateral engagement, says Thomas Fingar, the Oksenberg-Rohlen Distinguished Fellow at the Freeman Spogli Institute for International Studies.

“Developments in China and Japan should be viewed as creating new opportunities and imperatives to deepen multilateral co-operation,” Fingar writes in a Global Asia essay.

“It would be a mistake to view them only as the cause of eroding confidence in the co-operative mechanisms that remain critical to peace and prosperity in the region.”

China’s rise has actually been a result of policies supported by the United States and other countries, despite prevailing commentary that they are intended to “contain” China, he says. In fact, Beijing’s rise was achieved by working within the rules-based international system, not outside of it.

China’s actions and growing power, especially military power, are compelling other regional actors, notably Japan, to reconsider their strategic situation. The reinterpretation of defense policy guidelines proposed by the Abe government is a long-delayed response to China’s military buildup, not an effort to remilitarize as a popular narrative holds. Fingar says the proposed relaxation of self-imposed policy constraints on Japan’s military forces could help pave the way for a future collective security arrangement in Northeast Asia.

So, where does this leave the U.S.-South Korea relationship?

He says the two countries can maintain their bilateral commitments while also deepening partnerships with, and between China and Japan. Both the United States and South Korea can help push for improved ties on trade and regional security issues. 

“We need continued bilateral – and increased multilateral – co-operation,” he says, particularly, “to mange the challenges of a nuclear-armed North Korea.”

The full article can be viewed on the FSI website.

Economic and demographic transition pose major challenges for countries worldwide, particularly in large developing countries like China; however, strengthening social welfare programs can offset negative effects and help promote a sustainable future, according to Karen Eggleston, a scholar of Asia health policy at Stanford University.

“Unprecedented economic growth in China spanning the last three decades has lifted hundreds of millions out of poverty and restored China to the prominence in the world economy that it once enjoyed centuries ago,” said Eggleston, who is a Center Fellow at the Walter H. Shorenstein Asia-Pacific Research Center.

“Demographic change not only shapes the trajectory of [its] development, but interacts with macroeconomic and microeconomic forces” in numerous ways.

Eggleston, who presented “China’s Demographic Change in Comparative Perspective: Implications for Labor Markets and Sustainable Development” at the Jackson Hole 2014 Economic Symposium “Re-evaluating Labor Market Dynamics,” says a combination of societal changes makes China distinctive, and that the country can offer insights in comparative perspective. She joined two other experts for a panel discussion on demographics during the three-day conference led by the Federal Reserve Bank of Kansas City, which draws dozens of central bankers, policymakers, academics, and economists from around the world.

The research stems from a project that Eggleston heads on policy responses to demographic change in Asia. The initiative, which is a part of the Asia Health Policy Program, grew out of a 2009 conference cosponsored by the Global Aging Program at the Stanford Center on Longevity. Its outcomes have included the publication, Aging Asia, a special issue of the Journal of the Economics of Aging focused on China and India co-edited with David Bloom of Harvard University, and two forthcoming books on urbanization and demographic change in Asia.

China in flux

China is the most populous country in the world with more than 1.3 billion people. Its sheer size alone creates heavy demands as demographics change, and the economy continues its shift from a centrally-planned system to a market-based system.

China’s population age 60 and older is projected to increase from one-tenth of the population in year 2000 to a staggering one-third by year 2060. Simultaneously, the population age 14 and under is projected to decrease by one-third between years 2010­ and 2055 (Figure 2).

Eggleston, and others who closely watch the situation, say these demographic changes will bring a myriad of challenges to the labor market and to cultural norms related to intergenerational support, work and retirement.

China’s low birth rates have largely been influenced by family planning campaigns that begun in the early 1970s, and later, the “one child policy,” a population control policy that allowed for the birth of only a single child in many families. Recently, the government has relaxed that policy, and analysts believe the change will eventually help to balance the population age structure and infuse the workforce with new employees, filling the void caused by retiring workers in the coming years.

In the meantime, preparing support structures for the older generations’ departure from the labor market is essential. Social welfare programs, including health insurance and retirement and childcare services, will see significant demand, and require restructuring to handle the influx.

China’s aging population experience is similar to other countries in Asia. Japan, South Korea and India are also projected to see significant increase in median age over the next 30 years (Figure 1). 

Eggleston says China has made positive steps toward restructuring its institutions, including establishing government-subsidized health insurance programs and reforming pension systems. Most notably since 2002, China took a large step towards universal health care by implementing the New Rural Cooperative Medical Scheme for rural residents. Now, nearly all citizens have access to basic medical care, which can support healthy aging as well as mitigate large “precautionary savings” and help those struck by medical conditions requiring significant services.

A pension system for people in China’s rural areas, developed by the government in 2009, also set up a supportive system by providing increased transfers for seniors, and, interestingly, supporting labor markets by easing the worries of adult children who migrate to urban areas for work.

China has been forward thinking with its related public policies, but it certainly can do more, Eggleston says. Integrating technology into its health systems, and making its services more fiscally responsible could improve efficiency, and expand access to care.

The full paper and handout from Eggleston’s presentation at the conference are available on the Federal Reserve of Kansas City website.