Economic, social, and security implications of East Asia's demographic transition

Asia’s demographic landscape is changing in a big way. Japan’s population is shrinking, as people are living longer, marrying later, and choosing to have fewer or no children. Korea is moving in the same direction, while China and the countries of South and Southeast Asia face similar issues in the coming decades. As this takes place, more people are moving to, from, and across Asia for job, education, and marriage opportunities.

These demographic changes present policymakers with new challenges and questions, including: What are the interrelationships between population aging and key macroeconomic variables such as economic growth? How will it impact security? What are the effects on employment policy and other national institutions? How have patterns of migration affected society and culture? What lessons can Asia, the United States, and Europe learn from one another to improve the policy response to population aging?

The Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) focused its third annual Stanford Kyoto Trans-Asian Dialogue on addressing the possible economic, social, and security implications of Asia’s unprecedented demographic transition. Thirty scholars, government figures, journalists, and other opinion leaders from Stanford, the United States, and countries across the Asia-Pacific region gathered September 8–9, 2011, in Kyoto, Japan, to discuss key issues related to the question of demographic change.

Comparative Demographics and Policy Responses

Japan’s shrinking workforce calls for labor policy changes, stressed presenters during the opening Dialogue session. Stanford Center for Population Research director Shripad Tuljapurkar stated that Japan’s population could decrease by as much as 25 percent and that its government has a window of approximately 40 years in which to act. In describing Japan’s demographic shift, Ogawa Naohiro, director of the Nihon University Population Research Institute, also emphasized the importance of good financial education for individuals as life expectancy increases.

Macroeconomic Implications

Economists Masahiko Aoki and Cai Fang addressed changes to East Asia’s economic landscape. Aoki, an FSI senior fellow, spoke of the transition from agriculture to industry that has occurred at different stages in Japan, Korea, and China and of the increasing cost of human capital that has followed. Cai, a Chinese Academy of Social Sciences labor and population expert, stated that after several decades of industrial growth China is now at a turning point in terms of its global competitiveness.

Labor and Migration

Scott Rozelle, codirector of Stanford’s Rural Education Action Program (REAP), opened the next day with a discussion of China’s rural human capital investment. Offering Mexico’s situation after the mid-1990s peso crisis as a comparison, he emphasized the immediate need for allocating more health and education resources to China’s rural areas. Ton-Nu-Thi Ninh, president of Tri Viet University, discussed the socioeconomic and cultural aspects of labor migration—a growing trend in Asia—and advocated that governments factor it more into their foreign policy development.

Security

The security impact of Asia’s demographic transition will take several decades to understand, but it will eventually lead to the need for significant policy re-strategization, stated Yu Myung Hwan, Korea’s former minister of foreign affairs and trade, during the closing Dialogue session. He suggested focusing on impacts that could result from the major changes taking place in fertility, urbanization, and migration. Concurring with many of Yu’s views, Stanford’s Shorenstein Distinguished Fellow Michael H. Armacost also noted the current lack of literature on the link between security and demography. In addition, he emphasized the need for the United States to continue pursuing good relations with China and Russia during this time of transition.

“Low fertility rates are not because women are all out there working. In fact, a number of countries have lots of females in the labor force and have achieved a resurgence of fertility. Achieving work-life balance is important, not just for women, but for men as well, and might play a role in lessening the gap in life expectancy between men and women.”

-Karen Eggleston, Director, Asia Health Policy Program

Throughout the event, Dialogue participants unanimously acknowledged the serious challenges facing policymakers as they look for ways to meet the evolving needs of individuals, families, and organizations. The demographic outlook is not entirely gloomy, however. Numerous participants also pointed to the potential for exciting advances and innovations in technology and international cooperation.

As in previous years, the event concluded with a lively public symposium and reception attended by students from Stanford and local universities, Shorenstein APARC guests and affiliates, and members of the general public. Speaking during the reception, Kadokawa Daisaku, mayor of Kyoto, and Kim Hyong-O, member and former speaker of the Korean National Assembly, acknowledged the significance of the Stanford Kyoto Trans-Asian Dialogue as a forum for addressing issues of mutual importance to the United States and Asia.

The Dialogue is made possible through the generosity of the City of Kyoto, FSI, and Yumi and Yasunori Kaneko. To read the final report from this and previous Dialogues, visit the event series page below.