The Effects of Aging Society on Consumer Market in China

Abstract

China is facing a dual challenge of declining household consumption and intensifying population aging. The elderly exhibit unique consumption patterns that affect overall demand. The inclusion of demographic factors in the study of insufficient consumption expenditure not only provides a theoretical understanding of China's aging population, but also encourages the government to actively develop the elderly consumption market and expand consumption, especially in the service industry. This article reviews the relevant theories of China's aging population and its impact on consumption, and analyzes the current situation of a large elderly population, fast aging rate, large regional differences, and "aging before wealth" in China. By studying the direct and indirect pathways of population aging on household consumption, an empirical model using panel data from 2002 to 2022 revealed a positive impact nationwide. However, regional differences have emerged; The aging population has stimulated consumption in the western region, but suppressed consumption in the eastern region. The central region has not shown significant impact. The further differentiation of urban-rural differences has had an impact. The article concludes with policy recommendations to promote household consumption in the context of China's aging population. Suggestions include implementing the "comprehensive three child" policy, transforming economic development, improving elderly care security (especially in rural areas), and cultivating the elderly industry and consumer market. These measures aim to address challenges and stimulate sustainable economic growth.