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Top 10 of 2016 – Issue #9: On the Brink of Demographic Crisis, Governments in East Asia Turn Slowly to Immigration

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Top 10 of 2016 – Issue #9: On the Brink of Demographic Crisis, Governments in East Asia Turn Slowly to Immigration

An elderly man practices Tai Chi in Urumqi, China. Like other countries in the region, China is projected to lose a significant share of its workforce due to aging in the coming decades. (Photo: Asian Development Bank)

For many countries in East Asia, the reality of a rapidly aging population, low fertility, and shrinking workforce is beginning to set in with governments and publics alike. In light of these challenges, 2016 saw governments in the region continue making movements—albeit slowly and carefully—toward embracing immigration as a policy tool. Policymakers tested the waters by initiating public discussions, making strategic plans, and setting up pilot programs. Yet amid public concern about immigration, significant openings remain far off.

East Asia—which includes China (and Hong Kong), Japan, Mongolia, North Korea, South Korea, and Taiwan—is among the fastest-aging regions in the world. Between 2010 and 2040, the World Bank estimates Hong Kong and South Korea are expected to lose more than 15 percent of their working-age adults; likewise, workforces in China and Japan are projected to shrink by 10 percent. Consistently low birth rates and increasing longevity, while markers of economic development, also mean a dwindling workforce, which in turn puts pressure on the pension system, imposes higher welfare costs, and inhibits economic growth.

To temper unfavorable demographic shifts, East Asian countries have implemented or considered a number of policies, including raising the retirement age, encouraging families to have more children, boosting female workforce participation, and investing in education, skills, and health. These policies often require significant investment upfront and do not bring immediate relief.

Although immigration would have the most immediate and direct impact on the size and composition of the workforce, it is one of the hardest solutions to sell to the public, owing to the region’s history of cultural homogeneity and very limited experience with immigration. In 2015, international migrants accounted for 0.07 percent of the population in China, less than 2 percent in Japan, and 3 percent in South Korea—well below the 10 percent to 20 percent shares seen in many Western countries. The grant of citizenship or permanent residence to immigrants is rare in most East Asian countries, and spots are usually reserved for members of the diaspora or exceptional foreign talent.

Slow and Steady

In 2016, a few prominent voices in the region called for increased immigration. Hidenori Sakanaka, former Director of the Tokyo Immigration Bureau and current head of the Japan Immigration Policy Institute (JIPI), stated in May that Japan’s population crisis can only be addressed by openness to large-scale immigration. Masahiko Shibayama, a special advisor to Japanese Prime Minister Shinzō Abe, echoed this sentiment when he argued that a sustainable system for accepting more foreign workers is needed.

However, in Japan and elsewhere, public opinion offers reason for policymakers to move with care in advancing major changes to immigration policy. A sizable share of South Koreans (44 percent), Japanese (36 percent), and Taiwanese (20 percent) view immigrants as undesirable neighbors, more so than people of a different race or religion, according to the World Value Survey.

As a result of this public skepticism, governments in the region are proceeding slowly with immigration reforms and are focused on attracting the most desirable of immigrants: Members of the diaspora and the highly skilled, particularly those who share the country’s ethnic or linguistic background.

South Korea, China, and to a lesser extent Hong Kong have set up policies to woo back expatriate nationals and their offspring. In 2016, China began setting up the country’s first immigration office, tasked with attracting overseas talent. The government also relaxed the requirements for permanent residence and streamlined application procedures in two pilot sites, giving stronger preference to ethnic Chinese from abroad. China also joined the International Organization for Migration (IOM) in 2016, a sign that it wants to participate in the global migration dialogue and is serious about strengthening its migration- and border-management capacity. South Korea has long been a pioneer in diaspora engagement in the region, offering preferential treatment under immigration law, including dual citizenship, for those with Korean ancestry.

In addition to wooing the diaspora, several countries in the region are seeking to tap into the lucrative international student talent pool. Although large numbers of Asian college and graduate-level students still choose to study in countries such as the United States, Canada, the United Kingdom, and Australia, student mobility within East and Southeast Asia is on the rise. Japan, Hong Kong, Taiwan, and South Korea all grant foreign students a period of residence following graduation to find jobs. And in 2016, Prime Minister Abe proposed a reform to the permanent residence system for skilled workers—pledging to make it the “fastest such system in the world.” This reform is also expected to lead to greater retention of foreign students.  

Beyond efforts to attract highly skilled migrants, guest-worker and trainee programs for low-skilled workers have also become common. In 2016, Taiwan saw a historical high of 600,000 low-skilled foreigners, mostly from Southeast Asia, employed in construction, manufacturing, and domestic work. Hong Kong has established programs for low-skilled workers, hosting more than 340,000 foreign domestic workers in 2016—about 5 percent of the total population. Unlike their higher-educated counterparts, low-skilled workers are offered far fewer benefits: Their jobs are temporary, they cannot bring family along, and by and large, there is no pathway to permanent residency or citizenship.

Fearing a labor shortage in areas such as construction and services ahead of the 2020 Olympic Games in Tokyo, Japan has moved toward encouraging more women to join the workforce, while also introducing a plan to bring in foreign workers. The government planned to pass a bill before the end of 2016 to expand a trainee program set in motion in the 1990s, which would allow foreigners to work in Japan for five years, up from three. Though the media rarely uses the term “migrant,” assuming foreign workers, graduates, and others will eventually leave, there is a relatively established population of long-term or permanent foreign residents.

Marriage migration, also common in South Korea, Taiwan, and Japan, presents its own challenges. As the number of foreign brides—primarily from mainland China, Vietnam, the Philippines, and elsewhere in Southeast Asia—has increased, so has the number of children born in mixed families, with subsequent impacts on the education system. For its part, South Korea has made improvements such as the 2008 Multicultural Families Support Act that offers language classes and educational and employment support, but as of 2016, still lacks an antidiscrimination law. Recent polling on the impact of foreigners and multicultural families reveal Koreans are wary of immigrants, and the country has seen an anti-multiculturalism backlash.

Rapid Growth Brings Rapid Change

Unlike countries in Europe and North America that have amassed their wealth over long periods with largely youthful populations that only recently began gradual aging, demographic change is taking place almost concurrently with economic development in China and only a few decades apart in Japan, Taiwan, and South Korea. This lack of lead time gives governments less space to maneuver and to court public opinion.

Furthermore, for countries that have traditionally viewed themselves as homogenous, immigration is a challenge, with plenty of cultural resistance and language barriers to overcome. Yet if their economies are to prosper, governments in East Asia will need to think harder and faster about policies, including immigration, to offset adverse demographic shifts.

Features

MPI Research

Sources

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