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Ageing society
OpinionComment
Marcella Chow
Marcella Chow

Macroscope | From China to the US, spending on healthcare, housing and education must rise

  • Ageing societies and the pandemic-induced shock to the medical system will drive spending to address capacity shortfalls and improve long-term care services
  • Meanwhile, a growing middle-class population and the rising cost of living call for greater spending on affordable housing and education

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Elderly residents tend to a child near a carousel at a shopping centre in Beijing. Photo: AP
Marcella Chow
The pursuit of a better quality of life amid a growing but ageing population and social inequality exacerbated by the Covid-19 pandemic has led to vast demand for improved social infrastructure.
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An important component of infrastructure-spending proposals relates to the upgrading of medical infrastructure. A key reason for this is the uptick in old-age dependency ratios. The effects of a growing “silver generation” and falling fertility rates mean the proportion of old-age population relative to the working-age population has increased significantly.

The old-age dependency ratio in China rose from 12.7 per cent in 2010 to 18.8 per cent in 2021, and in the same period it rose from 21.8 per cent to 29.5 per cent in the United States. As average life expectancy continues to rise and fertility rates remain stagnant, increasing old-age dependency ratios will put extra strain on existing healthcare systems and elder-care service providers.
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Despite this, healthcare-related spending has risen at a modest pace. China’s spending on healthcare as a percentage of its gross domestic product rose just 0.4 per cent, while in the US it rose by a mere 0.2 per cent.

Most recently, however, the outbreak of Covid-19 has exposed the fragility and lack of capacity in existing medical systems and supply chains, highlighting the urgent need for greater investment in medical infrastructure. With only 2.9 hospital beds per 1,000 people globally as of 2017, this lack of capacity could pose long-term systemic risks and potentially crowd out vital healthcare services if left unaddressed.

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