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Sunday, December 09, 2007

Demographics in China

Not always the best of writers last week or so, due to feeling a bit under the weather Xmas preparations, visitors etc etc, but back to my theme of demographics.

One area that is sometimes overlooked is China and the results of its one child policy that started in 1979. Well it is now over a quarter of a century old and this means that they will slowly be starting to leave the nest either to move to the cities. This means that the phenomenon of empty nesters that tends to kick in later in the UK as we tend to have the statistical 2.2 children is now starting to develop in China at a younger age - and more importantly at a younger working age.

So what does this mean to a rapidly developing country like China? Well according to the Economist, already there are 265 m Chinese aged between 40 to 64 with no dependent children. By the end of 2008 that will have risen by another 7m and by another 50 m over a ten year period.

This means that that for these empty nesters if mothers return to work will mean a large rise in disposable income. Already most of this group have basic household appliances washing machines fridges etc.

Some analysts believe (probably using Maslow’s hierarchy of needs no doubt) that there will be a rise in spending on premium products but also following on from the Japanese experience, they will want to travel a lot more probably initially in China but increasingly overseas. This of course is predicated that China’s economy continues to grow at the same pace and that there are jobs for everyone at the right level of expectations. There may also be cultural norms that the article doesn't consider that may also reduce the rate of growth.

This may mean more work designing hotels or increasing infrastructure investments to cope with some of these new migratory habits. It may also mean new cities that are environmentally neutral as the eco-city being built in Dongtan. Could we start to see China as we have in Dubai creating off shore islands close to cities for people to live in once their children have moved out?

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