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.

On a rainy day last November, twelve fellows made their way up the steps of San Francisco’s City Hall, a true initiation to the town that’s often shrouded in fog. But the grey didn’t affect the day’s mood. Meeting with representatives from the Mayor’s Office, the fellows learned about California’s legislature through the unique lens of San Francisco, the only city statewide that is also designated as a county.

City Hall is just one of many site visits that the fellows attended during their time in the Corporate Affiliates Program at the Shorenstein Asia-Pacific Research Center, a cornerstone initiative that has brought professionals from Asia to Stanford since 1982.

“This year, our class was one of the most diverse ever, with fellows coming from Northeast to South Asia and representing a wide array of expertise from business to aerospace,” says Denise Masumoto, the manager of corporate relations at Shorenstein APARC. “We structured the program to support their interests and spur conversation with APARC scholars, and with those in the community beyond.”

The Corporate Affiliates Program provides yearlong fellowships for professionals from Asia who come to Stanford to learn about the United States, exchange ideas and participate in activities of mutual interest. The fellows keep a busy schedule: conducting a research project, auditing classes and attending site visits and seminars.

Now at the end of the academic year, the 2013–14 class has all but just departed. Before this, Shorenstein APARC spoke with three fellows about their experience: Tetsuo Ishiai from Tokyo, Japan; Tejas Mehta from Mumbai, India; and Wendy (Wei) Wang from Beijing, China. Highlighting moments and memories, the fellows struck conversations that underlined a few common themes.   

Thinking dynamically

At the heart of Silicon Valley, Stanford offers a unique base for fellows. As a hub for technology and venture capital, the area has an entrepreneurial buzz that grabs your attention, Ishiai says.

“To move toward open architecture, this entails movement to a more service-oriented structure,” he explains, and says that industry must ask the right questions. “What specialized services and facilities are required for this? What should be developed as the standard going forward?”Ishiai, who normally works at Mitsubishi Electric’s headquarters in Japan, has examined the shift in data management practices and its implications for business during his time at Shorenstein APARC, leveraging his experiences from over twenty years at the company.

When asked if he would share anything when he arrived back home, Ishiai says a message he will convey is the importance of creativity and determination.Ishiai says Silicon Valley offered an excellent environment to perform his research; he joined conferences at Stanford and visited many IT companies in the Bay Area. Ishiai also talked with industry executives through his courses at Stanford’s d.school.

“Exciting thinking and passion for starting new business ventures was very evident in Silicon Valley culture,” he says. “This type of support and ambition should be encouraged in Japanese corporate culture, especially among young employees, who can often be less recognized.”

Ishiai says he made many connections here, and looks forward to returning to Stanford in the future.

Finding partners

When asked to describe a favorite memory, Wang says that challenges have brought forth her richest experiences as a fellow. Speaking English on a daily basis and finding a stride in university life again were obstacles at first, she says, but when paired with the right people and resources, good things happened.

“I connected with a graduate student at CEAS, who I met with weekly to practice my language skills and share cultural observations,” she says. “We became close friends – I even hosted members of his family when they visited California.”Wang normally works in corporate banking at the Industrial and Commercial Bank of China (ICBC), an entity with an expanding scope of business overseas. To suit this trend, Wang says she sought to improve her English skills while in the United States. Masumoto encouraged her to seek out Stanford’s Center for East Asian Studies (CEAS), which offers advanced Chinese language instruction. There, Wang found a surplus of graduate students who were eager to help.

The theme of collaboration echoed in the courses she audited at the Graduate Business School, which allowed her to interface with top executives from JetBlue and Nike in a small group setting, and through dialogue with her research advisor, Jean C. Oi, a professor and director of the Stanford China Program at Shorenstein APARC. 

“Each time I met with Jean, she would offer up a slew of new questions,” Wang says. “She pushed me to really examine the details of my research – a different experience than I’m used to in China where expression is less direct, open.”

Comparative perspective

The global pharmaceutical industry sees extensive overlap between the government, business and academic sectors worldwide, but the variation across countries is what makes it so interesting, says Mehta, who has worked in medical marketing at Reliance Life Sciences for nearly a decade.

“A significant difference between India and the United States is the two country’s health care systems with respect to their insurance structures,” he says. “However, all stakeholders, whether in the United States or India or elsewhere, share the common objective of improving patient’s treatment outcomes and reducing overall cost of healthcare.”

Mehta analyzed challenges for pharmaceutical businesses through his courses at the Graduate Business School, such as “Leading Strategic Change in the Health Care Industry.” The course is structured to examine the environment for incumbent health care players like companies and hospitals, but also to look at the dynamics for entrepreneurial start-ups. A prime opportunity, given the budding initiatives for innovative treatment and health information services in Silicon Valley. A comparative perspective is necessary to learn from and question how things are done both at home and abroad. Mehta says being at Stanford, an institution with a strong foundation in medicine, greatly informed his research. His focus on theranostics, an emerging field of customizable testing and treatment for patients, was enhanced through dialogue on- and off-campus.

The classroom experience, coupled with visits to a variety of businesses in the Bay Area, gave Mehta a fuller view of the intricate market for U.S. medicine, and its relations with government and the private insurance system.

Looking back, he says it is hard to single out a few memories because there are many, but one that would top his list is visiting City Hall.

Over 215 million Muslims live in the Asia-Pacific region, but despite their number and proximity to record growth and opportunity in greater Asia, their experience has been one of persistent, widespread socioeconomic and political decline. 

A new book, Modes of Engagement: Muslim Minorities in Asia, published by the Walter H. Shorenstein Asia-Pacific Research Center (APARC) and distributed through The Brookings Institution, offers leading research on this topic and places it in a geographic perspective. Edited by Rafiq Dossani, a senior researcher at the RAND Corporation and Professor at the Pardee RAND Graduate School of Public Policy, the book paves new paths to understanding the paradox of Muslim minorities in Asia. 

Dossani was at Stanford University for nearly fifteen years as a senior research scholar at Shorenstein APARC and as the executive director of the South Asia Initiative, studying the plight of Muslims and higher education in India, among other topics. The book is a result of a seminar series with the book’s contributors.

“Since the 1970s, especially in China, Asia’s growth rate has been unprecedented within Asia’s own history,” Dossani says. Mainstream Asia has seen a rise in job opportunities and income levels, and as a result, an individual ability to accumulate wealth and commit resources to long-term investments, such as education and innovation activities.

However, not all people have found benefit from this modern, economic transformation. Most notably, Muslims have seen a severe decline in their social and political space, as well as a narrowing of their identity.

Analysts find this surprising because history reflects a narrative that says Muslims should have profited along with the rest. “It wasn’t expected that Muslims would lose out in the countries in which they were minorities,” he says.

The volume investigates this puzzle through three case studies: the Philippines, India, and China. In each country, Muslims are at least 5 percent of the population, the largest number being in India. Dossani weaves together common threads that define the Muslim minority experience. Similarities include the impact of state-led ethnic nationalism and forced assimilation. He also writes that Muslims have been unable to use protest to secure any significant, long-term gains.

Given this dire reality, what prospects lie ahead for Muslim minorities? In conversation, Dossani suggests a few policy priorities gathered from the case studies featured in the volume.

Democracy is not the answer

Democracy, a form of governance that is often championed for its equal civic participation, has not facilitated a level playing field for Muslims when theory dictates it should.

“Democracy is not the answer to handling these problems,” says Dossani, emphasizing, “it is a most inadequate answer.”

This situation is evident in the case of India where Muslims have probably done the worst, compared to the Philippines, which also shares a legacy of colonial rule and transition to democracy.

Muslims in India, who have attempted to elevate their interests on the national stage, are stopped by coalition politics. Larger interests of the group can subsume their own, encroached upon further by caste issues, language barriers and other dividing factors. China’s Hui have found a significantly better experience than the Uyghurs, who were separated from mainland China early on and excluded from opportunities afforded there (the Uyghurs reside in a northwest region, Xinjiang). In the case of India, Muslims make up only ten to fifteen percent of the population in almost every state, thus their voice fails to find leverage in the political sphere, and effectively lose out.

Furthermore, democracy is not a panacea when states are vulnerable.

“When you have very weak and fragile states, where intuitions are subject to capture easily, democracy doesn’t work,” Dossani explains. Muslim minorities are unable to gain clout because the majorities, and elites attempting to fill a power vacuum, crowd them out.

Thus, collective interest and concerted efforts on the part of governmental and non-governmental organizations – a larger nexus of individuals working toward common goals – are essential to create momentum and staying power behind Muslim issues.

“You need civil society where it explicitly deals with the issues of minority populations and tries to convince the national government and state governments that improving the lots of minorities should be a national project with commitment to their improvement,” he says.

Development as a way forward

Some national projects were developed to openly address Muslim issues, but this led other internal ethnic and religious groups to ask, “Why are you appeasing the Muslims?”

Especially since 9/11, governments have increasingly come under pressure. Stigmas that narrow Muslim identity into “extremists” and “terrorists” are more progressively shared, making it near impossible for governments to explicitly offer a helping hand to Muslims without domestic backlash. 

But even with the odds against them, Muslim minorities still have a way forward.

In the three countries studied, Muslims have found traces of success, and in other Asian nations such as Sri Lanka and Nepal, there has been considerable accommodation of Muslims. Across all circumstances, “Muslims have done best in countries where the state has focused on education for all,” Dossani says.

Instead of providing ethnic-based aid, governments should focus on resource availability as a main qualifier for assistance. State-sponsored education and health care initiatives that capture the poorest populations help Muslims who inherently fall into this category. 

“Any wise government would say ‘look we want to connect education to development and focus on the poorest, no matter who they are.’ If they do that, Muslims will automatically get their fair share,” he says. The Philippines has already recognized this reality, and begun to implement development projects that naturally include Muslims.

Regime change can also motivate Muslim accommodation, either directly or indirectly, as is likely in the case of India.

Newly appointed Prime Minister Narendra Modi, although said to have an anti-Islamic stance in the past with the Bharatiya Janata Party, may in fact create policies that favor Muslims because it fits in with a grander vision of national growth. 

Referring to Prime Minister Modi, Dossani says, “It’s not clear that he cares about Muslims, but in some ways, he cares about development.

“At some point, any development-conscious person will realize that no country can progress if 15 percent of the country hangs behind.”

Diaspora matters

The swell of migration in the globalized era has made the formation of diaspora communities, dispersed populations outside of country of origin, a common phenomenon. Muslim minorities are a large part of this movement, seeking opportunity and using their ethnic or religious connections to establish a new life elsewhere.

Muslims of Asian origin are located beyond Asia – in the Middle East, North Africa and Southern Europe, among other areas. But despite being removed from their native soil, an allegiance and interest in the homeland typically remains.

“Diaspora exists in a very big way,” Dossani explains. Their influence should not be underestimated, both financially and politically. The Muslim diaspora provides an important channel of support that helps struggling Muslim populations.

Remittances from relatives overseas can bring in substantial transfers of money and support to populations that may not otherwise have enough resources, or be supported by the government. For several years now, one of the single largest inflows of money into the Philippines has been from these outside sources. India’s Muslim diaspora has a strong diasporan foundation with codified institutions set-up to organize relations. China’s experience is less documented, Dossani says, although he conjectures that some diasporan support exists, whether formally or informally.

Diaspora organizations, often led and supported by expatriates, appear to be growing worldwide, and can play a crucial role in the formation of Muslims’ global identity and network of support. Neighboring countries with Muslim majorities, such as Malaysia and Indonesia, have also offered themselves as diplomatic partners in resolving conflicts over Muslims’ conditions, given their own long histories of addressing them internally.

The Obama administration’s policy of “re-balance” toward Asia, that began as early as 2009, is now increasingly under stress, as those in the region question American staying power and China emerges as a challenger to U.S. dominance. As the territorial disputes in the East and South China Seas in recent months have demonstrated, China’s relations with the region and the United States have become visibly strained, bringing the U.S. re-balance policy into question and raising concerns about security tensions and the danger of conflict. 

U.S.-China relations are heading, for the foreseeable future, into “a very scratchy time,” predicted Kenneth Lieberthal, a respected senior China scholar at The Brookings Institution, in his keynote speech delivered at the annual Oksenberg Lecture on June 3 at the Shorenstein Asia-Pacific Research Center.

Lieberthal told a standing room audience in Encina Hall that while the U.S. attempt to temper its relations with China and others has “worked quite well over time,” now, “at a geostrategic level, we seem to be sliding with increasing speed toward an inflection point in U.S.-China relations.”

Lieberthal was joined by a panel of China experts, including Cui Liru of the China Institutes of Contemporary International Relations (CICIR), and Stanford’s Karl Eikenberry and Thomas Fingar, distinguished fellows at the Freeman Spogli Institute for International Studies, and Jean C. Oi, director of the Stanford China Program.

The discussion was part of the Oksenberg Lecture, an annual dialogue that functions as a policy workshop on U.S.-Asia relations, named in honor of late professor and senior fellow Michel Oksenberg (1938–2001). Oksenberg was a noted China specialist, who served as a senior member of the National Security Council and is credited as the architect of the normalization of relations with China under the Carter administration in the late 1970s.

Points of tension in the U.S.-China relationship have been increasingly visible. Senior American officials have assailed China for its aggressive actions toward its neighbors over the Diaoyu/Senkaku Islands and in South China Sea, including its latest altercations with Vietnam and the Philippines. The United States recently indicted five members of China’s People’s Liberation Army for carrying out cyber espionage against U.S. technology companies.

Incidents like these have prompted both countries to throw harsh words at each other, leading to a situation of brinkmanship. However, Lieberthal pointed out that tense relations between the United States and China are certainly not new. Most notably, relations took a nosedive in 1989 when China cracked down on democratization protests at Tiananmen Square, in 1999 after the accidental bombing of the Chinese Embassy in Serbia, and in 2008, in response to the global financial crisis.

The U.S.-China relationship has been riddled with periods of distrust in the past. But now, “the speed and scale of China’s economic growth, especially over the last two decades, has also increased concerns, on all sides, that the evolving distribution of power may create new frictions and suspicions,” Lieberthal said.

Yet, refusing to work with each other is not an option, the senior scholar, who also served in the Clinton administration, told the audience. Without the United States and China in conversation, progress in multilateral areas such as climate change and trade would falter, he argued. Given the two countries’ position as the world’s largest economies, the international system would effectively be constrained if the two were entrenched in long-term bitterness.

Lieberthal recognized the common admonition, “if we treat China as an enemy, it will surely become one,” saying this warning could be applied to both sides. China and the United States must make greater efforts to manage and mitigate tensions.

“The question is whether we can prevent bad things, not only specific conflicts, but the political tensions and politics that make cooperation on major issues very, very difficult at best.”

He then outlined a few steps that could help China and the United States sort out their disputes. His recommendations began with the need for strong determination on the part of top political leaders to move things forward and the importance of clear, consistent use of vocabulary when discussing issues.

As a final point, but one that was offered as a contingent factor to success, Lieberthal said U.S.-China relations and both countries’ roles in greater Asia will depend on “how effective each of us is in dealing with domestic reforms,” because, “that will determine how dynamic, how vibrant, how innovative, and how secure we feel.”

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During the lecture, Ret. Lt. Gen. Karl Eikenberry shared his observations from the Shangri-La Dialogue, an inter-governmental security forum held from May 30 – June 1 in Singapore. The Dialogue has in recent years become a gathering of premiere defense ministers to discuss security issues in Track I and “quasi-track” meetings.

Afterward, Eikenberry talked with Shorenstein APARC about key highlights and implications that emerged from the Dialogue:

Shangri-La Dialogue

Photo credit: Flickr/The International Institute for Strategic Studies 

Media reported a tense environment overlaid the Dialogue. What was the general atmosphere there?

The remarks at the Shangri-La Dialogue by Japanese Prime Minister Abe and U.S. Defense Secretary Hagel on the one hand, and Chinese General Wang Guanzhong, made clear very different views on the causes for tension surrounding various maritime sovereignty claims in the East and South China Seas. Still, if you read the full text of all three speeches and the Q&As that followed, there is still great emphasis placed on dialogue and common interests. And in the many meetings that took place between national delegations on the margins of the conference events, the emphasis was on cooperation. 

What revelations at the Dialogue were surprising?

I think the degree to which dissatisfaction with China’s assertive behavior in pursuing its maritime claims was expressed by many of the participants – not just the United States and Japan. Vietnam, the Philippines and India were explicit. Analysts have said the only China (through threatening behavior) could contain China by catalyzing a counterbalancing response. From the results of the Dialogue, I think this is correct.   

Japanese Prime Minister Shinzo Abe emphasized values and international law throughout his keynote speech. What is your take on this?

The Prime Minister did emphasize both democracy and rule of law during his prepared remarks and answers to questions from conference participants. He was drawing an obvious distinction between Japan’s and China’s political systems and commitment to approaches to resolving territorial disputes. I think the Prime Minister is trying to establish Japan as a leader in East and Southeast Asia, and wanted to make clear what he views as important differences between the Japanese and Chinese “models.” 

U.S. Defense Secretary Chuck Hagel referenced China’s suspension of the U.S.-China Cyber Working Group. What direction do you think the cybersecurity dialogue will go now?

It was unfortunate that China suspended its participation in the U.S.-China Cyber Working Group after the U.S. Government’s indictment of five People’s Liberation Army officers for alleged cyber theft. The U.S. Government has been providing the PRC Government with evidence of cyber theft being conducted by entities in China and has failed to receive any meaningful response so the indictments seem warranted. It would seem that the Cyber Working Group is precisely the forum to discuss this matter and the many related to managing the cyber domain with agreed rules and procedures. Working Groups provide a forum to address disagreement and disputes. I think China’s response was counterproductive and hope the government will indicate a willingness to resume the dialogues in the near future.

Where do you see the regional security conversation heading next?

The risk is that security dialogues will be divided into two camps – one led by the United States and its close allies and partners, and the other by China – somewhat isolated at this time but seeking to entice Asian nations to bandwagon to its side. Perhaps further regional economic integration can facilitate a more common approach to security, but this year’s Shangri-La Dialogue is perhaps a warning that trends, for now, are not heading in a positive direction.

Ambassador Kathleen Stephens, the Koret Fellow at the Walter H. Shorenstein Asia-Pacific Research Center in the Freeman Spogli Institute for International Studies, has been named the United States’ chargé d’affaires to India. Stephens was asked to step in to replace retiring Ambassador Nancy Powell at a critical moment, with the formation of a new government in India following the sweeping election victory of the Bharatiya Janata Party led by Narendra Modi.

Stephens will assume the position in June and remain until a new ambassador is nominated and confirmed by the U.S. Senate, the State Department said in a press briefing.

“I look forward to being in India during a momentous and promising time, and to working to deepen the relationship between the United States and India. My time at Stanford allowed me to engage with extraordinary colleagues and students at APARC and beyond, and will stand me in good stead as I take on new challenges in India,” Stephens said.

Stephens served as acting under secretary of state for public diplomacy and public affairs in 2012. She was the U.S. ambassador to South Korea from 2008 to 2011, and principal deputy assistant secretary of state for the Bureau of East Asian and Pacific Affairs between 2005 and 2007. Her connection to Asia began in the 1970s when she was a Peace Corps volunteer in South Korea.

She has been in residence at Shorenstein APARC for the academic year, conducting research and participating in projects related to U.S.-Korea relations and greater Asia. Stephens also taught a course for Stanford students while here.

Shorenstein APARC Director Gi-Wook Shin said Stephens’ appointment reinforces the Center’s tradition of scholarship and promotion of bipartisan interaction with governments.

“We’re delighted by the news of Kathy’s appointment. Her long-standing ties with Asia and foreign affairs experience will serve her well in this important position. Kathy’s presence greatly enhanced our Center’s work and research agenda, and we wish her well as she heads to India,” Shin said.