Shrinking workforce will dent East Asia’s economies

Significance Persistently low fertility rates mean that the next decade will see ‘super-aged’ societies not just in China but also in other key East Asian economies, including Hong Kong, Japan, South Korea and Taiwan. Socio-economic shifts have lowered fertility rates and shrunk the workforce, while higher dependency ratios have increased debt burdens. Impacts A greater use of robots is expected to reduce the impact of the ageing population on manufacturing production. East Asian businesses linked to services for young adults will shrink while businesses for the elderly, including healthcare, will grow. High property prices in the region could drop significantly in the long term as demand lessens due to a shrinking young population. East Asia will likely ease immigration rules to mitigate labour shortages, although a sudden influx could generate social conflict. Regional governments will urge firms to use high-tech measures to counter a shrinking workforce, demanding increased productivity.