Japanese Prime Minister Shinzo Abe and his Liberal Democratic Party won by a landslide in the national election for the upper house of parliament on July 10. Writing for Toyo Keizai, Shorenstein APARC Associate Director for Research Daniel Sneider said American policymakers hope the Prime Minister will use the fresh mandate to kick-start stalled economic reforms and to move ahead on implementation of Japan’s new security legislation. Read the article here.

The Independent writes about REAP's early childhood education centers and efforts to provide babies in rural China with a stimulating start to life. To read the original article, click here.

Around 8 per cent of rural children in China take college entrance exams, compared with 70 per cent of urban children. Reap officials believe this is due to a woeful lack of mental stimulation for rural youngsters between birth and the age of three. They say this is the crucial period for neurons to connect in the brain and set a path for a child’s mental ability later in life. “Around 92 per cent of neurons will have completed connecting by the age of three,” says Professor Shi Yaojiang, who heads Reap at the Centre for Experimental Economics in Education at Xi'an city’s Shaanxi Normal University. “This period is critical for early development. If parents don’t nurture their child’s brains during this time, then mental ability cannot be maintained. If you miss it, it’s irreversible.”

To combat all this, Reap, which was set up in conjunction with Stanford University in California, has founded seven education centres in China’s centrally located Shaanxi province. Caregivers bring toddlers there for weekly play and learning sessions with trainers such as Mr Li, and can use the facilities all week.

The sessions are meticulously planned, offering age-appropriate toys and materials to stimulate motion, cognitive skills, language and social abilities. They are all designed to help ensure a child's crucial mental development. “We don’t have toys at home, and my granddaughter just used to rip up books,” says Chen Huafen, a grandmother who comes to the centre with her grandchild. My granddaughter’s parents work away in Xi'an, so I take care of her,” Ms Chen adds. “At first I told them I didn’t know how to nurture a child, so they said: ‘Go to the education centre.’ Everything is good here. At home my granddaughter would just play in the dirt.”

The four-room education centre is a burst of life and colour in the sparse village, the streets of which are deathly quiet due to most residents working away in fields, or as migrant workers. The centre is small and basic, filled with new toys and picture books. A ball pit and plastic slide make a colourful centrepiece, and the cartoon-adorned walls and floors are padded to help boisterous toddlers avoid accidents. The children who come to the centre are happy and calm, occupied by the wealth of playthings on offer, the tinny squawk of push-button electronic toys drowning out sporadic, short-lived tantrums. Most of the children have no such items at home.

Reap has around 90 trainers who also make home visits to around 550 families living too far from the centres to travel to them. There are fewer than 20 centres at the moment, but there are plans to increase the number to 50 and pressure on the government to roll out the project nationwide.

Every six months Reap researchers compare mental ability test scores garnered from the Bayley Scales of Infant and Toddler Development between children who take part in the education course and those who don’t, and the results show the project is working. The group’s scores are maintained over time at an average of 97, and researchers have found that if children don’t take part in the course, their score declines to an average of 81. “And with a score of 81, you are not going to have the ability to graduate from high school,” claims Professor Shi.

Professor Shi has discussed the benefits of Reap with 27 National Health and Family Planning Commission officials from provinces across China in an attempt to see it spread throughout the country. Some have started setting up their own regional education centres. He hopes that the government will be enticed to fund a nationwide rollout by offering the prospect of a better-educated workforce: one more suited to China’s ongoing shift away from agriculture to urban industries.

Caixin media cites REAP's research on middle school dropout rates in commentary on the importance of investing in China's rural human capital. To read the piece in its original Chinese, click here.

Recently, an academic consensus has emerged that China should focus its human capital development in rural areas. Rural residents receive only an average of 9.6 years of education, which leaves them ill-prepared for high-skilled work. Yet with the increased mechanization of factories, manufacturing jobs will likely move offshore, or revert back to the West. This is a great risk for an economy transitioning from low-income to high-income status, such as China.

REAP's research has shown that middle school dropout rates in rural China have reached 63%. In addition, psychological problems of rural students are on the rise due to being "left-behind" by migrating parents. China's poorly formed land, residence and education policies have lead to this predicament. It's time for China to implement better policies for rural children. Investing in rural children is investing in the future of China.

The Asia Health Policy Program at Stanford’s Shorenstein Asia-Pacific Research Center, in collaboration with scholars from Stanford Health Policy's Center on Demography and Economics of Health and Aging, the Stanford Institute for Economic Policy Research, and the Next World Program, is soliciting papers for the third annual workshop on the economics of ageing titled Financing Longevity: The Economics of Pensions, Health Insurance, Long-term Care and Disability Insurance held at Stanford from April 24-25, 2017, and for a related special issue of the Journal of the Economics of Ageing.

The triumph of longevity can pose a challenge to the fiscal integrity of public and private pension systems and other social support programs disproportionately used by older adults. High-income countries offer lessons – frequently cautionary tales – for low- and middle-income countries about how to design social protection programs to be sustainable in the face of population ageing. Technological change and income inequality interact with population ageing to threaten the sustainability and perceived fairness of conventional financing for many social programs. Promoting longer working lives and savings for retirement are obvious policy priorities; but in many cases the fiscal challenges are even more acute for other social programs, such as insurance systems for medical care, long-term care, and disability. Reform of entitlement programs is also often politically difficult, further highlighting how important it is for developing countries putting in place comprehensive social security systems to take account of the macroeconomic implications of population ageing.

The objective of the workshop is to explore the economics of ageing from the perspective of sustainable financing for longer lives. The workshop will bring together researchers to present recent empirical and theoretical research on the economics of ageing with special (yet not exclusive) foci on the following topics:

• Public and private roles in savings and retirement security
• Living and working in an Age of Longevity: Lessons for Finance
• Defined benefit, defined contribution, and innovations in design of pension programs
• Intergenerational and equity implications of different financing mechanisms for pensions and social insurance
• The impact of population aging on health insurance financing
• Economic incentives of long-term care insurance and disability insurance systems
• Precautionary savings and social protection system generosity
• Elderly cognitive function and financial planning
• Evaluation of policies aimed at increasing health and productivity of older adults
• Population ageing and financing economic growth
• Tax policies’ implications for capital deepening and investment in human capital
• The relationship between population age structure and capital market returns
• Evidence on policies designed to address disparities – gender, ethnic/racial, inter-regional, urban/rural – in old-age support
• The political economy of reforming pension systems as well as health, long-term care and disability insurance programs

Submission for the workshop

Interested authors are invited to submit a 1-page abstract by Sept. 30, 2016, to Karen Eggleston at karene@stanford.edu. The authors of accepted abstracts will be notified by Oct. 15, 2016, and completed draft papers will be expected by April 1, 2017.

Economy-class travel and accommodation costs for one author of each accepted paper will be covered by the organizers.

Invited authors are expected to submit their paper to the Journal of the Economics of Ageing. A selection of these papers will (assuming successful completion of the review process) be published in a special issue.

Submission to the special issue

Authors (also those interested who are not attending the workshop) are invited to submit papers for the special issue in the Journal of the Economics of Ageing by Aug. 1, 2017. Submissions should be made online. Please select article type “SI Financing Longevity.”

About the Next World Program

The Next World Program is a joint initiative of Harvard University’s Program on the Global Demography of Aging, the WDA Forum, Stanford’s Asia Health Policy Program, and Fudan University’s Working Group on Comparative Ageing Societies. These institutions organize an annual workshop and a special issue in the Journal of the Economics of Ageing on an important economic theme related to ageing societies.

More information can be found in the PDF below.

On the heels of the IISS Shangri-La Dialogue, scholars, members of think tanks and former U.S. and Chinese government officials came to Beijing to discuss what many participants considered “the most important bilateral relationship” in the world: the relationship between the United States and China. As former U.S. Ambassador John Negroponte described during his opening remarks, the relationship, “if properly managed,” can result in an enormous boon for the world; but if mismanaged, can bring great harm to global stability and prosperity.

Stanford and Peking University jointly hosted a forum titled “A Changing Global and Political Order: Perspectives from China-United States Cooperation” on June 6-7 in Beijing. All attendees, who participated in their capacity as private individuals, acknowledged that a level of uncertainty and tension clouds the bilateral relationship, exemplified most clearly in the territorial disputes in the South China Sea. Having participated in the restoration of Sino-U.S. relations in 1972, Negroponte and former Chinese Ambassador Wu Jianmin remarked upon the geopolitical rationale that first motivated this rapprochement: to counter the Soviet Union. They noted that the bilateral relationship has grown increasingly robust and multi-dimensional over time. For example, Wu cited that trade between the United States and China has increased exponentially, from a mere US$1 billion in 1978 to $550 billion in 2015. Investment, economic cooperation and competition have also grown. Despite disagreements on regional security matters, both countries have worked together on global challenges such as climate change, North Korean and Iranian nuclear issues, anti-piracy efforts and the Ebola outbreak.

However, with China’s rapid rise, both militarily and economically, and as the developing world has gained increasing clout on the world’s stage, many participants suggested that the current global order, originally envisaged in 1944 with the Bretton-Woods Agreement, needed an update. Many participants, especially on the Chinese side, stated that the “balance of power was shifting” with the G7/G8 yielding economic momentum to the G20. The American participants generally did not share Chinese views of a power transition, but conceded that reforms were necessary to the global order to take into account China’s meteoric rise.  Participants did not dispute the benefits that China has derived from the current international order and most agreed that some type of evolutionary change is needed to increase inclusivity. As one participant asked regarding China’s perception of the United States (and vice versa), “Are we foes, enemies or friends?” Despite such ambiguity, U.S.-China cooperation is essential to effecting any type of change.

Questions were rife and specificity was scant with respect to what the key changes were or the mechanisms by which those reforms should be effected, however. Which countries should partake in this decision-making body? Should other entities and institutions other than nation-states be included? What are the rules of participation and criteria for membership? How large should the governing body be? What key reforms need to be undertaken?

Both Negroponte and Wu disavowed the zero-sum mentality of the Cold War, which, Wu stated, continues to impact perceptions on both sides. They both highlighted the critical importance of frequent dialogue by the Chinese and American heads of state and by their militaries. Calling summit-level meetings between the two presidents “indispensable,” Negroponte emphasized that “[both] leaders have to understand [the] viewpoints and attitudes of each country” in order to formulate the right policies. Negroponte added, “[d]iplomacy at that level is probably more important than it has ever been.”

As this summary of the forum is posted, we note with sadness the untimely death of Ambassador Wu Jianmin on June 18, 2016, in a tragic car accident in Wuhan, China.

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Photo gallery from the conference