Nhóm 8 - Chapter 1 Study Case

NHÓM 8:
Nguyễn Thị Lan Anh

Huỳnh Giang Thanh
Phan Bùi Huỳnh Như
Trần Tuấn Kiệt
CHAPTER 1: AN OVERVIEW OF INTERNATIONAL BUSINESS
1-22. What challenges do graying populations create for companies?
Challenges created by graying populations for companies:
Aging populations pose multiple challenges for businesses. Graying populations lead to a
shrinking workforce, higher salary demands due to limited labor supply, and increased
taxes to support aging citizens. Companies also lose valuable knowledge and experience
as retirees leave, increasing pressures to fill skill gaps, especially if younger workers do
not have the same level of expertise. Firms also need to accommodate the different
consumption needs of retirees, who typically spend more on healthcare services rather
than goods consumed by younger people.
1-23. What opportunities do graying populations create for firms?
Opportunities created by graying populations for firms:
Graying populations create opportunities for businesses that can cater to the needs of
older citizens. For instance, there is increased demand for healthcare services, retirement
financial products, and innovations such as medical technology. Companies in Japan, for
example, are at the forefront of developing products and technologies tailored for the
elderly, such as systems that allow seniors to self-administer medical tests or devices
equipped with wireless transmitters to monitor daily activities that assist older adults in
maintaining independence and improving their quality of life.
1-24. How will demographic changes affect the competitiveness of countries in the
international marketplace?
Demographic changes, particularly population aging and changes in population size, will
have a significant impact on the competitiveness of countries in the global market.
Countries such as Japan, Russia, Italy, Germany and South Korea are experiencing aging
and shrinking populations, leading to a decline in the labor force. This can lead to higher
wage costs and a greater burden on younger workers to support the elderly, through
family financial transfers or higher taxes. These economic pressures reduce the funds
available for consumption and investment, thereby negatively affecting competitiveness.
In addition, as more workers are employed to care for retirees, the number of workers
available for other economic sectors also decreases, limiting the potential for economic
growth. In contrast, countries with young populations such as India can benefit from a
growing workforce, although they face the challenge of providing enough jobs for this
young workforce. China is also aging and faces unique challenges due to its one-child
policy, which has led to an imbalanced sex ratio and a shrinking pool of young workers.
As a result, China will face similar growing pressures as Japan, with a rising dependency
ratio and fewer workers to support a large elderly population. Changing consumption
patterns, as retirees demand more health care and consume fewer consumer goods, will
also restructure market dynamics and affect international competitiveness. Aging nations,
such as Japan and Western European countries, will need to invest in innovation and
automation to stay competitive.
1-25. What can countries do to counteract the impact of these demographic changes
on their economic competitiveness?
To combat the impact of demographic changes, countries can deploy a range of strategies.
First, they can invest in automation and technological advances to compensate for a
shrinking workforce. For example, Japan is leading the way in developing service robots
and adapting work environments for an aging workforce. Countries can also implement
policies to encourage increased birth rates or promote immigration to sustain population
growth.
Governments can reform pension systems and implement policies that encourage older
people to continue working longer, thereby easing the burden on younger workers. In
addition, adjusting education and training programs can help equip young workers with
the skills needed for a rapidly changing economy, boosting productivity. Governments
should also encourage policies that support higher birth rates and workforce participation,
such as providing parental leave and affordable childcare.
Countries can also reorient their industries to accommodate changing consumption
patterns due to an aging population. For example, sectors such as health care, retirement
services and medical technology can thrive in aging societies, while countries with young
populations can benefit from the expansion of sectors such as education, housing and
consumer goods. Furthermore, building strategic partnerships with countries with young,
developing populations can help fill labor shortages and balance global economic
dynamics.
1-26. What has been the impact of the one-child policy on China’s economic
fortunes?
Impact of the one-child policy on China's economic fortunes:
The one-child policy in China has contributed to several significant economic impacts.
One of the most notable effects is the shift in the country's demographics. China’s labor
force is beginning to shrink, leading to a graying population. The working-age population
has started to decline, and the number of women aged 18-35, as well as the population
aged 20-24, has already decreased led to a skewed gender ratio. This suggests that family
formation and birth rates will continue to drop in the coming years, which will create
additional economic challenges. As a result, China is facing a shrinking workforce,
higher dependency ratios, and increasing burdens on the younger generation, who may
need to support not only their parents but also for grandparents due to the one-child
policy and the increase in life expectancy. This demographic imbalance threatens
economic growth as fewer workers are available to support an expanding elderly
population, leading to rising costs in elder care and potential labor shortages in the future.
1-27. Go to the U.S. Census Bureau’s international database at www.census.gov.
Pick two countries and analyze their changing demographics. Which one faces the
more favorable demographic future?
China and India in terms of their demographic trends and future prospects:
China's Demographic Trends
Figure 1. Demographic data of China

1. Population Decline: China's population, currently around 1.4 billion, is expected
to begin declining soon, with projections indicating a population of around 1.3
billion by 2060. The effects of China's one-child policy have led to a shrinking
workforce and an aging population, posing challenges for economic growth.
2. Aging Population: By 2060, nearly 30% of China's population will be over the
age of 60. These growing elderly population will create significant challenges for
the country's social security and healthcare systems, as fewer workers will be
available to support a larger number of retirees.
3. Gender Imbalance: The one-child policy also resulted in a gender imbalance,
with a higher proportion of males than females, which could affect family
formation and long-term population growth.
4. Shrinking Workforce: China’s labor force is shrinking, which will put pressure
on wages and limit its manufacturing competitiveness. The reduced number of
young workers also means slower economic growth in the future.
5. Economic Impacts: China’s shrinking population and aging society will slow
economic growth unless technological advancements and policy reforms are
implemented to counteract these demographic shifts.
India's Demographic Trends
1. Population Growth: India's population is younger and growing, projected to
surpass China’s population around 2027, with expectations to reach 1.6 billion by
2060. A younger population means a large workforce for decades to come, which
could help drive economic growth.
2. Youthful Workforce: India’s median age is much lower than China’s. In 2060, the
median age in India will be around 37, compared to China’s 48.7. This gives India
a significant demographic advantage with a larger and more dynamic working-age
population, contributing to a "demographic dividend."
3. Rapid Urbanization: India is undergoing rapid urbanization, which is driving
economic growth and creating more job opportunities. However, the country faces
challenges related to infrastructure, education, and healthcare, which need to be
addressed to maximize the potential of its young workforce.
4. Employment Challenges: While India has a large workforce, creating enough
jobs for its growing population will be a challenge. The country will need to invest
heavily in education, skill development, and industrialization to ensure
employment for its youth.
5. Economic Impacts: With its youthful population, India has the potential to grow
its economy significantly, provided it can manage its challenges related to
infrastructure, education, and inequality.
Comparison: Which Faces a More Favorable Demographic Future?
Figure 2. Demographic data of India

 Workforce: India has a significant advantage over China in terms of workforce
size and youthfulness. While China’s working-age population is shrinking, India’s
is growing, which gives India the potential for sustained economic growth over the
next few decades.
 Aging Population: China faces a rapidly aging population, which will strain its
social systems and healthcare services. India, on the other hand, has a younger
population and more time to prepare for aging-related issues, giving it a longer
demographic window to achieve growth.
 Economic Growth Potential: India’s large and youthful workforce positions it
better for long-term growth compared to China, which faces a shrinking labor
force. However, India must address significant challenges in job creation,
education, and infrastructure to fully capitalize on its demographic dividend.
 Technological Advancement: China is more advanced in terms of
industrialization, technology, and infrastructure. However, India’s younger
population gives it the potential to surpass China if it can invest wisely in
education, technology, and innovation.
Conclusion
India has the more favorable demographic future compared to China. India’s younger
and growing population gives it a significant advantage in terms of workforce size and
economic growth potential. China, while economically more developed, is facing
challenges with a shrinking workforce and an aging population, which will slow its
growth unless it can innovate and adapt. India's challenge is ensuring it provides
education, infrastructure, and employment opportunities for its vast young population to
realize its full potential.
References:
1. Census Population Clock. (n.d.). Census.Gov. Retrieved 11 September 2024, from
https://www.census.gov/popclock/embed.php?component=counter
2. Population by Age and Sex for China, India, and United States: 2020 and Projected
2060. (n.d.). Retrieved 11 September 2024, from
https://www.census.gov/library/visualizations/2022/comm/population-age-sex-china-
india-us.html
3. Population Clock: World. (n.d.-a). Retrieved 11 September 2024, from
https://www.census.gov/popclock/world/in
4. Population Clock: World. (n.d.-b). Retrieved 11 September 2024, from
https://www.census.gov/popclock/world/ch
5. Wan He et al, (2022). Asia Aging: Demographic, Economic, and Health Transitions.
U.S. Government Publishing Office, Washington, DC.

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NHÓM 8:

Nguyễn Thị Lan Anh

Figure 1. Demographic data of China

Figure 2. Demographic data of India

2060. (n.d.). Retrieved 11 September 2024, from

3. Population Clock: World. (n.d.-a). Retrieved 11 September 2024, from

4. Population Clock: World. (n.d.-b). Retrieved 11 September 2024, from

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