The Era of Longevity

Front matter

Dongsheng Chen

The Era of Longevity

Transformation of Aging, Health and Wealth

Preface

Establishing a New Understanding of the Era of Longevity

Only by standing at a height of 10,000 m to see the world and observing the world from the perspective of one hundred years can we have the vision and persistence, not deviate from reality, and gain an earlier and further view.

If the 250 thousand years history of mankind from the hunting-gathering era was condensed into one day, then in the first 23 h and 58 min and 30 s of that day, human beings would be in the long process of evolution from hunting-gathering civilization to agricultural civilization. There was no significant change in human living standards in general until 1800 A.D., when human life expectancy was not much different from that of the hunting-gathering era—basically 30-35 years old. However, in the last minute and a half of that day, with the emergence of the Industrial Revolution, mankind seemed to have opened the door of miracle. The Industrial Revolution lives up to its reputation as a “great revolution”. It has started the rapid development of human civilization in the past two and a half centuries. Technological progress has made mankind break through limits and created unprecedented prosperity. The progress of agricultural technology has enabled mankind to solve hunger problems on a large scale and continuously improve nutrition. The use of coal and oil has greatly improved the efficiency of human production and laid the foundation for the industrial system. The high-speed iteration and upgrading of computer and communication technology have been constantly changing human communication and lifestyle and have greatly reduced the costs of human production. Since the Industrial Revolution, human life expectancy has doubled. By 2019, the global life expectancy reached 72.6 years old, and the life expectancy in developed countries generally surpassed the threshold of 80 years old. The global population also increased from less than 1 billion in the early eighteenth century to 7.7 billion in 2019. Today, we are used to the bustling world until the COVID-19 pandemic wreaked havoc across the globe in 2020, triggering memories of the 1918 Flu Pandemic (also known as the Spanish Flu) that had been buried for more than a century. If we take this once-in-a-century pandemic as the beginning of the next day, we cannot help but ask the following

XXVi Preface questions: Will prosperity after the Industrial Revolution continue to be in place tomorrow? Can the human beings who ride in this blue ark in the vast universe survive the era of resource scarcity and march toward endless growth?

In recent years, people of insight have actually felt that mankind is standing at the crossroads of our times. I think that from the perspective of the span of time and space over a hundred years, the changes of our times we are facing include three aspects. The first is the great change in globalization and the world landscape. The second is the great change in civilization form and production and lifestyle brought about by taking carbon peaking and carbon neutrality as development goals. The last is the great change of mankind as a species in the era of longevity. These three aspects influence each other and will become the main forces affecting the global future.

Globalization brought about by the market economy has profoundly changed the international landscape. In the more than 200 years after the Industrial Revolution, major countries in the world gradually moved toward the development model dominated by the market economy after experiencing modern wars and revolutions. In the past 30 years, globalization has become the theme. The nature of globalization is the global allocation and optimal utilization of various production factors. Due to the difficulty of cross-border labor flow, when multinational companies allocate their global factors, a large number of manufacturing jobs relocate to China and Southeast Asian countries, which have cheap labor supply. However, the living conditions of local blue collar workers in developed countries have not improved significantly or have even moved backward. A series of anti-globalization phenomena, such as Donald Trump’s taking power, Brexit, and Sino-US trade tensions, are the concrete reflection of this process. The political, economic, and social problems brought by globalization are the key variables that affect the current world landscape. These variables will gradually reach a new equilibrium after collision and adjustment.

Carbon peaking and carbon neutrality are the in-depth reflection on industrial civilization and a revolution of human production and lifestyle. Industrial civilization is based on fossil fuels, which bring about environmental problems such as climate warming. New energy technology is rebuilding this system. At the same time, with the application of 5G and artificial intelligence, all sectors of the society and economy will operate in a more efficient way and will change the structure of energy consumption. In the future, using clean new energy will greatly replace fossil fuel combustion in the energy supply, which brings limitless possibilities for a new technological revolution. After breaking through the shackles of energy consumption, the exploitation of the “rich data mine” will reach a new breakthrough, which will reshape the production process, reduce waste, and establish a more sustainable development pattern. Human society will enter the era of ecological civilization. In this process, the old industries will be replaced by the new industries. As the emergence of digital photography technology makes the traditional film industry disappear, similar stories will be seen in many industries in the future.

The advent of the era of longevity is closely related to the fate of mankind. What we call the “the era of longevity” refers to a social situation in which the proportion of the elderly population is very high when the population growth slows

Preface xxvii down significantly (or even heads to the negative territory) and the age structure of the population converges to a “column-shape”. In such a state, the proportion of people aged 65 and above will exceed one-fourth of the population for a long time. At present, countries with middle-income and above in the world are generally in the era of longevity. According to the data of the seventh national census, China’s population aged 60 and above has exceeded the population aged 0 to 14, reaching 264 million, accounting for 18.7% of the total population. The age structure of China’s population is converging to the “column-shape”. Japan has already entered the era of longevity. The proportion of people aged 65 and above reached 28.7% in 2020, and negative population growth was first seen in 2005. The era of longevity has a new state of population balance, ending the explosive population growth of more than 200 years after the Industrial Revolution. In the era of longevity, it is likely that people’s life expectancy will increase steadily, while the total population will decline steadily. At present, the life expectancy of mankind increases by 2-3 years every decade. In approximately 30-50 years, a life expectancy of 100 years will be possible for everyone. Although life expectancy growth is what people are glad to see, when a country’s population starts to decline and the proportion of the elderly population is large, economic growth is bound to face challenges, and society will also bear great pressure on reallocation. In that case, the original development track must be changed accordingly.

The era of longevity is a topic about human beings. I think it is different from the big propositions related to the environment such as globalization. Human beings are the subjects of all economic supply and demand and other social phenomena. With the changes in population surge, balance, and recession, human beings’ socioeconomic organizations will also be adjusted, transformed, and rebuilt. Unleashing the economic potential in the era of longevity and maintaining economic growth will become a major issue that all countries cannot avoid. “Economic growth can be predicted based on macro fundamentals in the short term, structure in the medium term and population in the long term’, this is an important understanding I have formed in many years of macroeconomic research, and it’s also a methodology that can be used to analyze the market. For a long time, Taikang Insurance Group, I founded, has been deeply engaged in the life insurance industry. In recent years, it has entered into the fields of health and social care and Big Health industry, which is why I can gain deeper insight into the changes in industrial structure caused by population aging.

In 2020, I summarized my preliminary thoughts and wrote the article Theories and Countermeasures in the Era of Longevity. The article was published in the journal The World of Management. Recently, when reading articles published at home and abroad and studying this problem, I have more understanding of the era of longevity. I collected these new understandings and presented them in this book. A concept highly related to this book is population aging. The United Nations divides the degree of aging by the proportion of the elderly aged 65 and above in the total population of a country or region. If the proportion is more than 7%, then the country or region is called an aging society. If the proportion exceeds 14%, then the country or region is called an aged society. When the proportion is more than 21%, that society is called xxviii Preface a super aged society. Since the 1860s, major industrialized countries such as France, Sweden, Britain, and Germany have successively become aging societies. According to the data of the seventh national census in 2020, China’s population aged 65 and above accounts for 13.5%, which is close to the threshold of an aged society and makes population aging a hot topic. Aging is a phenomenon of population dynamics and the objective result of the development of many socioeconomic factors. However, it is often associated with negative meanings. People even use “silver tsunamis” to describe the destructive influences of population aging on the economy and society. In fact, when the elderly population grows to a certain level, the age structure will enter a relatively stable state. Social and economic organizations and factor allocation will gradually form a new equilibrium after adjustments and reconstruction. To summarize this understanding with a more precise and neutral concept, this book puts forward the concept of “the era of longevity”.

The term “the era of longevity” has been used in many situations in the past, but it has not been used systematically. At the end of 2019, the Documentary Channel of China Central Television (CCTV) was preparing to produce a documentary called “the era of longevity”, and its staff came to interview me. This was the first time that the expression “the era of longevity” came into my eyes at that moment. The director explained that they also spent a lot of time putting forward this creative title for the documentary. For me, this expression not only was creative but also helped me sort out my longtime thinking on this front. The concept of the era of longevity can inspire people to think out of the inherent framework confined by “population aging”. The advent of a new era will definitely rebuild the old era in all aspects. People need to proactively think about and envision the future in such a larger picture. I want to redefine this concept of the era of longevity.

Eliminate the Anxiety of Population Aging

Academia and think tanks around the world have performed much research on population issues, and the relevant research results are numerous. Since its birth, modern demography has experienced three main theoretical development stages. The mainstream view at the first stage is that Malthusian theory started at the end of the eighteenth century and developed until now, which holds that arable land and other resources in agricultural society impose restrictions on population growth. The well-known “Malthusian trap” means that the geometric growth of the population far exceeds the arithmetic growth of living resources, so this will lead to disaster. This obviously exaggerates the potential risk of population growth and ignores the possibilities of technological development. The main perspective at the second stage is the population exhaustion theory rising in the late twentieth century, which holds that population aging will negatively affect consumption, productivity, employment, and innovation and emphasizes the burden of feeding the elderly population. This is another extreme reaction of developed countries due to their lack of effective plans to deal with the impacts of population aging. The third stage is the broad

Preface XXİX discussion on “active aging” in the last two decades. This stage continues to today. The research fields are gradually diversified and segmented. People have begun to think that population aging is the embodiment of progress in the fields of social and economic development, medical treatment, and public health, and advocating rational and objective acceptance of aging has gradually become the mainstream view.

At present, almost all developed countries in the world are facing the challenges of population aging. The reason why people are concerned about population aging is that it is difficult for them to clearly foresee and effectively deal with its significant influences on human society. Based on relevant theories, the challenges brought by population aging to society are mainly in the following five aspects.

First, population aging has led to a decline in labor supply and has impacted the organizational form of industrial production. Due to the declining birth rate, the young labor force will shrink for a long time, and factories and enterprises may face the unavailability of the labor force.

Second, population aging will have a great impact on social savings and capital. Traditional life cycle theory thinks that the elderly are mainly consumers. With the increasing proportion of elderly individuals, the consumption rate will rise, and the overall social savings rate will decline. This will be detrimental to capital accumulation and have a negative impact on economic growth. Another view is that when population aging becomes a common understanding in society, people will be more inclined to save money for preventive purposes, resulting in the contraction of the consumption market.

Third, the aging society inhibits social development and innovation. The learning and innovation ability, pioneering spirit, and entrepreneurship of the elderly are generally not as strong as those of the young. Aging will have an adverse impact on the improvement of labor productivity and social innovation.

Fourth, the social security system will be unsustainable, and the government’s finances will be stretched. At present, the current social insurance systems in many countries are formulated during periods of rapid population growth. With the deepening of population aging, social income gradually cannot cover expenditure. Foreign countries generally deal with the deficit problem by putting off retirement age, increasing the public’s pension contributions, reducing pension amounts, and increasing fiscal subsidies. However, it is increasingly impossible for people to rely on a basic social insurance system to cover the living costs of elderly individuals.

Fifth, population aging may lead to serious social differentiation. A considerable number of people and families will bear a huge burden, and it will be difficult for them to get out of this trouble.

Japan is currently the country with the deepest degree of population aging in the world, and the proportion of people over 65 years old exceeded 28% in 2020. The problems mentioned above have gradually appeared in Japanese society, which has sounded an alarm to countries all over the world, including China. In recent years, in regard to topics related to the growth of the elderly population, dark clouds will cast a shadow in people’s hearts. Just as people are unwilling to face the inevitable old age, they are also unwilling to accept the inevitable aging society. However, looking

XXX Preface back on history, the end of the previous era must also be the beginning of the later era. When most people’s imagination is restrained by pessimism, we will also miss the first ray of sunshine cast through dark clouds in the era of longevity.

It seems to me that the challenge of population aging mentioned above is the second time that we have fallen into the Malthusian Trap. Only this time, the nature of the trap is not the limitation of external resources but some kind of self-limitation of human beings. Currently, a series of theoretical studies mainly focus on the phenomenon of population aging itself. They first assume that the basic operation mode of the economy and society remains unchanged and then carry out population aging research in isolation. It is like describing the industrial society in the agricultural era and “looking at the future from the past”. The conclusion must be outdated and of little benefit to the future. When we “look at the future from the future”, we will find that in human history, the church-led society finally adapted to the coexistence of science and belief, the farming-led society finally adapted to the joint participation of steam engines and workers in factories, and the world shrouded by infectious diseases finally worked together to beat the Black Death and smallpox. Countries afflicted by industrial pollution have also begun to put forward ambitious goals such as “carbon neutrality”. The continuous progress and large-scale application of technology will become effective tools for people to continuously solve social contradictions. The adaptive ability of governments, enterprises, and individuals at the micro-level and the internal impulse to pursue harmonious development can make full use of these tools to promote technological, institutional, and cognitive innovation. We have every reason to believe that mankind can solve these challenges in the future.

The concept of the era of longevity is a new adaptive worldview. If aging is an elegy of population decline, then the era of longevity has sounded the clarion call for people to actively pursue longevity, health, and prosperity under the trend of reaching a “new equilibrium” of population. The era of longevity will lead to a longevity economy. Under the interaction of new and old factors, we will gradually usher in a more harmonious and stable longevity society.

The Era of Longevity is a New Understanding of the Future of Human Society

The conceptual system represented by the era of longevity is a set of epistemology and world views that I have developed in the course of my long-term thinking about demographic change and its impact as well as my deep involvement in the Big Health industry over the past decade. This conceptual system is based on the future population and society form from a perspective of forward-looking and active adaptation and absorbs the cognitive changes brought by the development of science and technology. Karl Marx once said, “Philosophers have only interpreted the world in various ways. The point, however, is to change it.” I believe this new cognition has

Preface XXXi the potential to guide us to transform this society from our respective perspectives and make the future of mankind better.

What is the difference between the era of longevity and previous human society? This book believes that the era of longevity has five characteristics: The mortality rate has decreased to a low level, the life expectancy has been prolonged, the fertility rate has decreased to a low level, the age structure of the population is columnar, and the proportion of the population aged 65 and above has been more than one quarter for a long time. At the same time, with the continuous development of science and technology, another important transformation of the human production mode is taking place. Therefore, the applicability of the conclusion from the analysis based on the industrial era will be greatly reduced in the future. In this context, it is necessary for us to systematically update the traditional understanding of population aging and deal with this problem more proactively.

The era of longevity will be a new normal of human society in the future. In the industrial era, population aging is alienated into a pessimistic phenomenon, while in the era of longevity, population aging can be taken with a more objective attitude, and the high proportion of the elderly population can be seen as a new normal of human society. Under this new normal, the yardstick of measuring the length of human life will change fundamentally, the traditional pattern of life—study, work, and then retirement—will be rewritten, and the boundary between the three stages will become blurred. The continuous extension of life expectancy will force people to face new forms of employment, health, and financial challenges. Therefore, we must replan and rearrange the whole process of life. At the same time, the economic, political, and cultural structures of the whole society also need to be adjusted accordingly, which will bring new opportunities to people. Specifically, the new cognitive framework of the longevity era has the following characteristics.

First, the era of longevity is not just about “longevity”. The era of longevity not only pays attention to the extension of human life but also to the internal relationship between longevity and health, wealth, and other topics, as well as a series of economic and social changes behind this population phenomenon. It should be noted that mankind is about to enter the longevity era and the data era at the same time. With the development of technology, the data era will bring new production factors as well as new production and organization modes. The longevity era needs to fully take advantage of the development achievements of the data era to change the traditional socioeconomic development modes and better meet the challenges.

Second, the era of longevity will “start” the era of health. In the era of longevity, the main diseases disturbing mankind will change from acute infectious diseases to chronic non-communicable diseases. The extension of life expectancy makes “long-term survival with disease” the norm. The traditional medical model with a focus on acute disease treatment will turn into the medical model with life cycle health management as its core. Health has become the first consideration and the most precious wealth of an individual’s attention, which will stimulate and unleash people’s demand for health care. The huge health care demand will promote the rapid development of the Big Health industry, which is expected to become the cornerstone xxxii Preface industry of China’s economy in the future and bring the upgrading and transformation of industrial structure. The pharmaceutical industry, healthcare services, and health insurance are the core industries in the Big Health industry.

Third, the era of longevity “calls for” the era of wealth. The extension of life expectancy in the era of longevity will make people pay more attention to wealth accumulation and financing. The financing of elderly care and health care needs to consider the whole life cycle, which will lead to a strong demand for wealth management. The huge demand will also bring the supply-side reform of wealth management. As the capital market matures, individual investors will become more rational and more inclined to seek investment advice from professional wealth management institutions. They will also accumulate wealth through long-term compound interest and diversified allocation in their investment to reduce the risk of depleting their individual asset in the era of longevity.

Fourth, the era of longevity gives the elderly new social roles, which will also change the form of production and organization since the industrial era and bring about more possibilities for a longevity economy. Under the traditional understanding framework of population aging, some scholars have proposed that the elderly will boost the economy through consumption, but it is not enough to define the elderly only as consumers. Society must attach importance to the development of the human capital of the elderly and exploit the productive potential of elderly individuals. We are in a transition period driven by science and technology. The demand for manual labor continues to decrease. The Internet and 5G technology are restructuring production factors. Artificial intelligence and robots will completely liberate human capital. The value of the elderly will be recognized, positioned, and explored again, rather than staying in the stereotype position of the consumer of social resources. We should employ new ideas to enable the elderly to participate in the labor market in a more flexible way, such as imparting knowledge, skills, and experience, and let them create their own “the third demographic dividend”.

The era of longevity is a major issue concerned with the future development of mankind. How to eliminate poverty and disease and make people’s longing for a better life a reality in the era of longevity is what the country, society, and enterprises are thinking about. The era of longevity is also an era of health and wealth. It will not only profoundly transform the human society and economy but also inspire new solutions. Only when people from all walks of life have insights into the changes of human society in the era of longevity can they prepare for those changes in advance. The future of the era of longevity depends on the actions of all parties, including individuals, governments, and enterprises. Let us create a beautiful society collectively in which everyone can enjoy the gift of longevity!

Beijing, China Dongsheng Chen

Acknowledgments

Over the past years, I’ve traveled back and forth for numerous times between my thinking, putting my thinking to practice, and adjusting my theories based on the practical experience. The Era of Longevity is the work refined over and over in that process. Innovation, whether of business model or theoretical system, does not happen overnight. It must come from the collection of bits and pieces of learning, thinking, and practice. Hereby, I would like to thank my partners at Taikang especially, who have been there with me for more than 20 years. To some extent, this book is written for them.

The Era of Longevity spans multiple disciplines and industries. The mass of facts and conclusions in the book are cited and proposed from a multidisciplinary perspective. The intellectual support required by its completion was enormous. There are a dozen employees in Taikang’s “Super Brain”, which is our Strategic Development Department. They were deeply involved in the research and compilation of this book under my leadership. Their professional backgrounds cover multiple disciplines, such as economics, demography, public health, clinical medicine, and public policy. In the writing of this book, we worked together in depth, made careful verifications, and devoted a great deal of time and energy to providing necessary data, cases, and references. Their professional capability and diligence moved me deeply. The team is led by the head of the department, Dr. Li Mingqiang. The names of team members are Wang Shan, Zhu Ruohua, Dr. Cao Zhili, Chen Chong, Ma Xiaoxing, Ma Tunan, Ma Ying, Li Yuyu, Dr. Liu Zeyu, Dr. Mei Jing, Wang Mengzhen, Wang Ruobing, Xi Ziyao, Yin Tong, Yan Huan, and Dr. Sun Xuanxuan. Thank you all for your great contribution!

The second half of the book focuses on telling Taikang’s 25 years of growth, which is a practical process of exploring the optimal solution to the Era of Longevity. When describing Taikang’s entrepreneurial history and expounding its business model and logic, scenes of the past would often rush back to me. Those are the days and nights of hard work I spent with Taikang’s start-up team for over 20 years. Taikang’s start-up team includes those who traveled overseas with me on field trips: We visited elderly care communities, main executives, and colleagues in relevant administration. The team also includes the support groups who did not travel abroad with me at that time xxxiii

XXXIV Acknowledgments but provided support to us from China and so many more Taikang people. Taikang is a genetically innovative enterprise. We started as a traditional life insurance company and developed into what we are today. Every time we entered into a new field, it was a whole new start-up business for us, and each success was the result of our team’s collective wisdom and hard work. I want to thank everyone deeply. I cannot list all their names here, but without the efforts of each of them, Taikang would not have been where we are now, nor would it have been possible to put forward the theory of the Era of Longevity or launch the Taikang Plan. In addition, I would also like to thank Taikang’s previous board members, who contributed their expertise to lead the direction of Taikang’s development, ensuring that Taikang maintained a stable operation in rapid development while making continuous innovations.

Chapters 5—7 introduce a special group—the Taikang residents. The relationship between Taikang Community and Taikang residents is far more profound than those between ordinary enterprises and customers. It is safe to say that if there were no Taikang residents, there would be neither Taikang Community brand nor Taikang’s achievements in exploring the elderly care revolution. I want to thank all Taikang residents for their understanding and trust over the years. They expressed their attitudes toward life with the most “fashionable” lifestyles, and they are the true owners of Taikang Community and Longevity Economy pilots. Thanks to them, and a special thanks to the protagonists who share their community experiences in this book. In addition, in the writing of this book, I made reference to Everybody Talks in the Age of Longevity, Shenyuan Elders Talk About Life, Shenyuan Impressions and Shuyuan Story, and other books written by Taikang residents. Their profound insights proposed in these books are immensely inspiring to me.

After the draft of this book was completed, we invited anonymous experts to review the academic part of the book to ensure that the academic content was professional and rigorous. Their inputs and suggestions were professional and pertinent, which greatly contributed to the finalization of the book. In addition, I would like to thank the internal reviewers Zhou Lisheng, Zhao Liwen, and Tian Xin. Colleagues involved in editing, proofreading, imaging, and data collection include Liu Tingjun, Qiu Jianwei, Liu Shugin, Chen Ping, Chen Yilun, Chen Li, Ge Ming, Xiao Xinhui, Tao Junging, Chen Mo, He Rui, Wang Chao, etc. My thanks also go to Miao Li, Wu Zhonggang, Gu Angsheng, Lv Jiatai, and related departments of Taikang for their support during the publication of this book. My sincere thanks to them again.