Quartz: China can boost consumption by moving children and the elderly into cities

Here is a link to my fourth Quartz article, which was on Chinese urbanization and how it relates to the whole consumption/investment debate. An excerpt:

The first chapter of Chinese urbanization was a story of migrant workers. The next chapter will be about their families.

As China continues to grow, rich, effective urbanization will require more than just providing job opportunities. It will require new policy initiatives to bring more children and elderly from the countryside into the city. By doing so, the Chinese government can begin to address Chinese income inequality, rebalance the economy toward services and consumption, all the while setting the stage for further economic reforms.

According to population data from the Chinese National Bureau of Statistics, over the past 30 years the proportion of Chinese people living in cities has more than doubled from around 20% to over 50%. Most of the migration into the cities has been in the form of migrant laborers leaving the countryside in search of higher wages.

As a result, prime age laborers are overrepresented in the cities while children and the elderly are underrepresented. According to the 2009 population survey, the proportion of people in cities between the ages of 0-19 was about 2 percentage points lower than in the villages. This number was reversed for people between the ages of 20-39. When mothers and fathers move to the cities in search of higher wages, they leave their children behind to be taken care of by grandparents. As such, if urbanization is going to continue, it will need to bring these groups into the fold.