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Can Future Demographic Changes Bring Peace:
Long-Term Prospects of East Asian Security
Written by Alan Chen, The Eurasia Center
January, 2016
In the wake of continued clashes in the East China Sea over the ownership of
several disputed islands, most notably the Senkaku/Diaoyu Islands between China and
Japan, questions abound regarding the fragility of the security environment in East Asia.
Will economic integration and development continue apace, or will ongoing political
disputes and trends, such as the rise of China as a major regional actor, lead to a costly
regional arms race, or perhaps even armed conflict, between China, South Korea, and
Japan (undoubtedly involving the United States)? This has been the hypothesis posited by
several writers and analysts of Sino-American relations, such as Pillsburyb and Holslag,c
who have viewed the rise of China with pessimism, depicting China as a destabilizing
power in the East Asia region. Indeed, recent military budget increases seem to point
towards that direction, with South Korea proposing an average of 7% annual increase in
military budget from 2016 to 2020,d Japanese military budget increases of 2.2% in 2015,e
Pillsbury, Michael. “The Hundred Year Marathon: China’s Secret Strategy to
Replace America as the Global Superpower”. Henry Holt and Co. 2015.
c Holslag, Jonathan. “China’s Coming War with Asia”. Polity. 2015,
d Panda,
Ankit. “South Korea Is Planning a Huge Increase in Defense Spending”.
The Diplomat. April 22, 2015.
e Kelly, Tim. “Japan eyes defense budget hike to fortify island chain facing China”.
Reuters. August 31, 2015.
b
and Chinese military budget increases consistently remaining in the double digits since
the mid-1990s.f
Speculation on policy shifts and their long-term ramifications aside, there are
many complex factors dictating the geopolitical and security situation of the region.
Among the most under-represented metrics is demographics, and the role of demographic
transition in China, South Korea, and Japan on long-term trends in regional security. In
contrast to East Asian pessimists, the consequences of East Asian demographic shifts
point towards a long-term de-escalation of military escalation and the reduced risk of
intra-regional conflict, as the result of a “geriatric peace”.g Specifically, that while there
continues to be short term budgetary increases on military spending, a long term arms
race, over several decades, will be difficult to sustain due to the political and economic
pressures that aging populations will have in China, Japan, and South Korea. In addition
to this, aging populations has the potential to affect both the risk adversity of national
polities, and the available manpower in any hypothetical conflict. All of these factors
may be affected by future technological innovations or other unforeseen developments,
which have the possibility to drastically alter the impact of changing demographics upon
regional security policy; nonetheless, demographics remain an essential variable in the
future geopolitical equation of East Asian politics, and one which at present predicts
regional stability.
East Asian Demographic Pressures
At the surface, this appears to be a bold conclusion. How can something as
unassuming as demographics possibly affect geopolitical decision-making, and regional
security? To this end, the rate and nature of the decline must be elucidated for one to truly
appreciate the impact future demographic shifts will have on East Asian policy-makers.
The East Asian region commonly refers to China, Japan, and the Korean peninsula; North
Korea is removed from the analysis, due to political and economic differences and
isolationism, and is exceptional in regards to regional demographics and defense
spending patterns. The greatest unforeseen impact of North Korea upon this analysis
would be the possibility of Korean unification, which would have major economic and
demographic implications for South Korea.
Of the three East Asian countries under examination, Japan faces the most severe
demographic decline, with absolute population decline since 2004 (by 244,000 in 2013),
and over 22% of their population over 65 and older.h By 2050, the Japanese workforce is
projected to fall to 41.3 million from 66 million in 2013, an unimaginably difficult
Bitzinger, Richard A. “China’s Double-Digit Defense Growth”. Foreign Affairs. March
19, 2015.
g Haas, Mark L. "A Geriatric Peace? The Future of U.S. Power in a World of Aging
Populations." International Security 32, no.1 (Summer 2007). Pg 112-147.
h Banyan. “The incredible shrinking country”. The Economist. March 25, 2014.
f
demographic crunch that will strain its economy.i South Korea similarly is facing a 1.2%
annual decline in the size of its working age populationj. While currently not in as
advanced a state of demographic decline as Japan, South Korea is projected to match
Japan as one of the oldest populations in the world by 2050, reaching a similar rate of
demographic decline.k By 2060, it is projected that over half of the South Korean
population will be over 60.l
Like Japan and South Korea, China faces similar demographic trends, though as
yet neither as severe nor pronounced. In contrast to Japan and South Korea, which are in
far more advanced states of post-industrialized demographic transition, China is an
emerging economy and a burgeoning regional power whose demography has also greatly
been affected by national birth control policy, notably the “One Child” policy, which, in
addition to facilitating an aging population, has also facilitated the rise of a major gender
gap in the country, with a rising imbalance of over 34 million more men than women
(projected to peak by 2030-45 with a surplus of 40-50 million bachelors in the mid-21st
century), with major ramifications for Chinese development.m Additionally, by 20202025, China is predicted to hit its “Lewis Turning Point”, and have to shift from a labor
surplus to a labor shortage economy, as it begins to reach the same post-industrial
demographic decline as its neighbors.n Indeed, the aging of the Chinese population has
already begun, with the Chinese workforce beginning to shrink starting in 2013 (by 3.45
million),o and the number of elderly Chinese projected to increase by 100 million
between 2015 and 2030 (from 200m to 300m).p
Most significantly is that all three countries in the region face demographic
decline, as opposed to only one or a few. Unlike, for instance, the state of World War
One demographics, where French population (and economic) growth lagged behind
German, and German behind Russian. These underlying demographic factors greatly
influenced European geopolitical decision-making in the pre-war, Belle Époque, era, with
French policy-makers concluding that France could never compete with Germany alone
due to comparatively poor demography and growth vis-à-vis Germany (and thus forming
“The Graying of Japan: Tough Choices on the Population Dilemma”. Warton,
University of Pennsylvania. May 21, 2014.
j Leipziger, Danny. “South Korea’s Japanese Mirror”. The Diplomat. February 6, 2014.
k Pew Research Center. “Attitudes about Aging: A Global Perspective: In a Rapidly
Graying World, Japanese Are Worried, Americans Aren’t”. January 2014.
l Ibbitson, John. “A bleak future and population crisis for South Korea”. The Globe and
Mail. October 22, 2014.
m Boer, Andrea den, and Hudson, Valerie M. “The security risks of China’s abnormal
demographics”. The Washington Post. April 30, 2014.
n Das, Mitali, and N’Diaye, Papa. “Chronicle of a Decline Foretold: Has China Reached
the Lewis Turning Point?”. IMF Working Paper. International Monetary Fund.
January 2013.
o “Peak toil”. The Economist. January 24th, 2013.
p Wang, Feng. “China’s Population Destiny: The Looming Crisis”. The Brookings
Institution. September 2010.
i
the basis of French foreign policy in regards to Russia and Great Britain), and German
military and political leaders were alarmed at the rate of Russian economic growth and
military expansion.q In comparison, the East Asian countries all face similar decline,
which means that the effects of demographic shifts do not overtly favor one nation in the
region over another, leading to major power shifts.
Long Term Consequences of Demographic Decline
Overall, the consequences of East Asian demographic decline point towards the
unsustainability of a long-term regional arms race, the de-escalation of military tensions,
and, as a result, reducing the risk of intra-regional armed conflict in the region over time.
The most prominent effect of these demographic shifts are the several fiscal and
economic implications for the East Asian statesr. Most notably, a shrinking labor force
necessarily also slows economic growth, with less people working in the economy
(though this may be somewhat offset by technological innovations and increases in
productivity). Moreover, with an aging population, the demand for social services and
medical services greatly increases, with these financial demands resting on a shrinking
labor force. Political demand among the populace for healthcare and social services will
increase as the population ages, with an increasing share of national fiscal budgets being
devoted towards mandatory spending for social programs. In other words, East Asian
demographics will reduce the fiscal capacity of East Asian nations to spend on their
militaries, with both smaller growth in GDP and reducing state revenues, and increasing
demand for social services, thereby increasing state spending on domestic needs and
decreasing the proportion that can be spent on military expansion.s For China in
particular, which has until now relied upon comparatively cheap human labor costs while
the social safety net has languished, the economic and fiscal rebalancing that must ensure
will be difficult indeed.t
The impact of demographic decline also has a more direct effect on military
buildup: a shrinking labor force and national demographic of young adults limits the
ability of national militaries to recruit and train personnel, both directly, from the decline
of the total recruitment pool, and indirectly, by increasing demand for labor in other
sectors of the economy.u Additionally, as military equipment and modern warfare
Herwig, Holger H. “The Outbreak Of World War I (Problems in European
Civilization Series)”. Wadsworth Publishing. October 1996.
r Haas, Mark L. "A Geriatric Peace? The Future of U.S. Power in a World of Aging
Populations."
s Sheen, Seongho, “Demographic Peace: Decreasing and Aging Population and Its
Impact on Northeast Asian Security”. APSA 2009. Toronto Meeting Paper
t Wang, Feng. “China’s Population Destiny: The Looming Crisis”. The Brookings
Institution. September 2010.
u Apt, Wake. “Germany's New Security Demographics: Military Recruitment in the
Era of Population Aging.” Demographic Research Monographs, Springer
Netherlands. 2014.
q
becomes increasingly sophisticated and technical, the demand for skilled personnel by
military services will continue to increase. Militaries, as a result, must face increasing
competition with other economic sectors for recruitment for increasingly skilled and
increasingly scarce manpower, leading to rising costs of military personnel. The net result
of demographic pressure, with the budgetary considerations of aging populations in mind,
are smaller, highly skilled militaries, with high individual personnel costs, in addition to
rising costs associated with possible casualties and equipment loss. This by itself does not
necessarily mean that the nation’s capability to wage war and project power necessarily
diminishes (this will be highly dependent on the uncertain impact of innovations made in
military technology), only that the cost of both military buildup and war will continue to
increase in these nations.
Finally, in addition to fiscal, economic, and manpower constraints to a long-term
military arms race, older adults are noted to develop greater risk aversion.vw While
studies on risk aversion have been primarily focused on economic or personal risk-taking
tolerance, political demography have found similar increases in risk or instability
aversion among aging populations as a whole, as well as an aversion towards violence.x
The level of effect this has on national security policies is likely more pronounced in
democracies as opposed to authoritarian regimes, but undoubtedly remains a
consideration in the latter. In the context of security policy, as risk adversity declines, the
tolerance for the risk and instability that a drastic political tool such as war causes
drastically diminishes as the potential costs and risks inherently involved become
increasingly unacceptable, as opposed to alternate, “safer” methods of diplomacy and
engagement.
Conclusions
It is ultimately the interplay of these three factors of demographic decline that will
have a synergistic effect in steering the region away from armed conflict. As the cost of
military equipment and staffing increases, economic and fiscal constraints on budgetary
growth limit military budget expansion, through the need for increasing expenditures on
healthcare and social services. In addition to this, as GDP growth slows down in
conjunction with a shrinking labor force, available military volunteers become scarcer
and more expensive per head, and the impact of each potential casualty is magnified by a
risk-adverse population. Through these mechanisms, East Asian demographics, with
Note: while discussing Germany and NATO best practices, the concepts and
discussions presented serve as a template for East Asian security policy due to
similarities in demographic decline.
v Bellante, Don, and Green, Carole A. "Relative risk aversion among the elderly”.
Review of Financial Economics, 13:3, (2004). Pg.269-281.
w Yao, Rui, Sharpe, Deanna L., and Wang, Feifei. “Decomposing the age effect on risk
tolerance”. The Journal of Socio-Economics, 40:6, (December 2011). Pg. 879-887.
x Goldstone, Jack A, Kaufmann, Eric P., and Toft, Monica Duffy. “Political
Demography: How Population Changes Are Reshaping International Security and
National Politics”. Oxford University Press. 2011.
concurrent decline in all three primary regional actors, checks the ultimate likelihood for
armed conflict, as China, Japan, and South Korea will be hampered in their capacity to
expand their military arms, regardless of intentions.
These long-term trends do not necessarily mean that regional peace in East Asia is a
foregone conclusion. The impact of demographics is but one factor in the complexities of
world geopolitics and political decision-making processes. Russia, for instance, despite
ongoing demographic decline, remains an assertive power on the world stage, with a
recent propensity for foreign military interventions, in the Ukraine and most recently in
Syria. Nonetheless, the economic and political ramifications of long-term population
decline in East Asian countries still provide a potent constraint on any long-term military
escalation in East Asia, in conjunction and contradiction with a multitude of other
essential factors, and point towards the likely possibility that soon, East Asians will
simply be too old to fight one another: a “geriatric peace” indeed.