[NSP Report 56] Population Aging and Northeast Asian Security

Associate Professor, Graduate School of International Studies, Seoul National University. Professor Shin Sung-ho holds a Ph.D. in International Politics from the Fletcher School at Tufts University. He has served as a research professor at the Asia-Pacific Center for Security Studies (APCSS) under the U.S. Department of Defense, a visiting fellow at the Northeast Asia Program of the Brookings Institution in the U.S., and a visiting fellow at the East-West Center in Washington. His research interests include East Asian security and national strategy, the ROK-U.S. alliance and the Korean Peninsula, and demographic change and Northeast Asian international politics. Recent publications include “Nuclear Sovereignty vs Nuclear Security: Renewing the ROK-US Atomic Energy Agreement,” “Demographic Peace: Rapid Aging and Its Implication for Northeast Asian Arms Rivalry,” “The ROK-US Alliance in the 21st Century: A Smart Alliance in the Age of Complexity,” and “Two Approaches to Nuclear Terrorism: Bush and Obama.”

I. Introduction

The rise of China has spurred active international political discussions on the security dynamics in Northeast Asia. Realists predict that as Northeast Asian countries increase their defense capabilities based on their growing economic power, they will fall into security dilemmas, intensifying competition (Friedberg 1993-94; Betts 1993-94; Buzan and Segal 1994; Duffield 2003; Christensen 1999; Wu 2005-06). They particularly warn that the rise of a rapidly growing China will eventually lead to a hegemonic competition between the U.S. and China and military confrontation in the region (Mearsheimer 2001). Indeed, defense expenditures in the Northeast Asian region have continuously increased over the past period. China's defense spending, in particular, has recorded double-digit growth, showing rapid military expansion over the last decade. Even before becoming the undisputed second-largest economy in the world in 2010, China had already become the world's second-largest defense spender after the United States in 2005. South Korea, in line with its economic size ranking 15th globally, has recorded remarkable defense spending increases over the past decade, ranking 12th worldwide (SIPRI 2010). Japan's defense spending, despite its policy of maintaining 1 percent of its Gross Domestic Product (GDP) since the mid-1970s, ranks fifth globally in absolute terms, reflecting its continuously growing economy (SIPRI 2010). The arms race in Northeast Asia tends to be amplified by persistent political and military issues such as North Korea's nuclear development, historical and territorial disputes between South Korea and Japan, and between South Korea and China, political tensions surrounding Taiwan, and the rise of nationalism (Christensen 2011; Rozman and Lee 2006, 761-784; Matthews 2003).

However, there are also optimistic views on the future of Northeast Asia. Despite the checks and balances among great powers, inter-state conflicts and distrust, and political confrontation in the region, liberals argue that cooperation is possible through increasing economic interdependence, the proliferation and activation of multilateral institutions, increased socio-cultural exchanges, and the spread of democracy (Pempel 2005; Kurlantzixk 2007; Katzenstein 2005; Katzenstein and Shiraishi 2006). Furthermore, some constructivists argue that due to East Asia's unique traditions and culture, China's rise will proceed in harmony with regional states, unlike in the West, and that the power transition may occur more peacefully than expected (Kang 2003; 2004; Berger 2003, 387-420). However, the arguments of liberals and constructivists do not entirely refute the realists' claims. Realism questions why the arms race in Northeast Asia continues to escalate, asserting that the arms race in Northeast Asia exhibits the typical characteristics of competition and power politics among past European great powers.

The three main elements of mainstream international political theory—power, institutions, and ideology—remain important for explaining geopolitical competition and cooperation in Northeast Asia and predicting its future. However, these alone are insufficient, as the reality upon which the theories are based is constantly changing. It is necessary to consider other variables that will influence the future of Northeast Asia (Suh, Katzenstein and Carlson 2004, 1-33; Acharya 2008, 57-82). In 21st-century international politics, individuals, non-governmental organizations, multinational corporations, and international organizations beyond nation-states are emerging as significant actors. New areas of concern in international politics, such as rapid environmental changes including global warming, poverty and hunger, and global diseases, are emerging as potential threats greater than inter-state wars. State-to-state relations are now influenced by a more complex and diverse set of factors. Among these, demographic changes, which have been rapidly progressing since modernity, have emerged as a factor significantly influencing not only the internal society of a nation but also inter-state geopolitics. Some international political scholars are drawing attention to the rapid demographic changes occurring in major powers, including the United States, as a factor that will significantly impact the balance of power among these nations. Nicholas Eberstadt points out that the rapid decline in birth rates and population aging occurring primarily in developed countries are proceeding at an unprecedented pace in human history. These demographic changes act as a fundamental factor in reducing the economic productivity of these countries and lead to a long-term decline in national strength. The problem is that the effects of these population declines and aging become apparent suddenly after a certain period of latency. Moreover, it is difficult to reverse these problems once they begin to manifest. Consequently, the rapid demographic changes currently underway will act as a new factor determining the power transition among major powers in international politics (Eberstadt 2010, 58-67; 2003). Mark L. Haas argues that an aging population structure will mitigate military competition among major world powers, including the United States. The U.S., Europe, and China are currently experiencing rapid population aging. This phenomenon, referred to as 'global aging,' is assessed to contribute to maintaining peaceful relations among major powers, including the U.S. (Haas 2007, 112-117).

Northeast Asia is undergoing more rapid demographic changes than any other region. The rapid aging of Northeast Asia will significantly impact not only the politics, economy, and society of each country but also their interrelationships, particularly geopolitical competition and arms build-up. This study argues that the aging trends in China, Japan, and South Korea will have a significant impact on the arms race in Northeast Asia. Population decline due to low birth rates and aging, and the contraction of the working-age population, will not only slow economic growth in these countries but also inevitably lead to a rapid increase in welfare expenditures. The slowdown in economic growth and the increase in welfare spending will create severe fiscal pressure on national finances through a synergistic effect. This will ultimately become a significant constraint on other fiscal expenditures, particularly defense spending. The arms race in Northeast Asia may be slowed by demographic changes. In the case of Northeast Asia, the possibility of 'demographic peace' is opening up, rather than 'democratic peace'.

II. Rapid Aging and Population Decline in Northeast Asia

1. Rapid Aging in Northeast Asia

Population aging is a phenomenon caused by declining birth rates and increasing life expectancy. In Northeast Asia, both of these phenomena are occurring rapidly and simultaneously. A comparison of demographic changes in China, Japan, and South Korea with those in the United Kingdom, France, and Germany reveals the severity of low fertility and aging in this region. Table 1 shows that the decline in fertility rates in the three Northeast Asian countries has been severe for a long time. Japan's fertility rate fell below 2.1, the replacement level, as early as the 1950s, and South Korea has also experienced declining fertility rates since the 1980s. As a result, both South Korea and Japan currently have the lowest fertility rates in the world. China's fertility rate is also lower than that of the UK and France due to its 'one-child policy'.

[Table 1] Fertility Rates by Country

Source: United Nations, World Population Prospects: The 2008 Revision Population Database

(New York: United Nations, 2008), http://esa.un.org/unpp/index.asp?panel=2, select variant: medium

Conversely, the remarkable economic development in Northeast Asian countries has resulted in a rapid increase in the average life expectancy in these societies. Table 2 shows that the life expectancies in South Korea, Japan, and China are rapidly catching up with those in Europe.

[Table 2] Life Expectancy by Country (Both Sexes)

Source: United Nations, World Population Prospects: The 2008 Revision Population Database

(New York: United Nations, 2008), http://esa.un.org/unpp/index.asp?panel=2, select variant: medium

The combination of low fertility and rapidly increasing life expectancy has led to a rapid increase in the elderly population (aged 65 and over) in China, Japan, and South Korea. Table 3 shows the changes in population structure by country. While Japan transitioned to an 'aging society,' where over 7 percent of the population was aged 65 or older, between the 1950s and 1970s, South Korea and China entered this phase in 2000 and 2001, respectively. In 2011, Japan surpassed the threshold for a super-aged society (defined as over 21 percent) with 23 percent of its population aged 65 or older, becoming the most aged country among the comparison nations (Japan Ministry of Internal Affairs and Communication 2011). By 2025, South Korea's aging population will catch up with that of the UK and France, entering a 'super-aged society,' and China's elderly population will constitute 13.4 percent of its total population. By 2050, Japan and South Korea are predicted to be the most aged countries on Earth... (to be continued)