A Chinese Academy of Social Sciences report says the number of people above 60 years of age would cross 200 million sometime between 2011 and 2015, and would rise sharply from 2016 through 2040.

The government needs to devise plans to meet the rising social security and healthcare costs, deal with a tightening labor market and overcome other potential obstacles if it wants to maintain rapid economic growth.

The number of senior citizens has grown because of the rising life expectancy. And the low birth rate the family planning policy has brought about has increased the senior citizens' ratio in the population. Another big worry is the expected 23 percent decline in the working-age population - people between 15 and 64 years of age - between 2015 and 2050.

A country's population is its destiny. China has been the fastest growing economy for a long time because of its huge population. It has been on the fast development track ever since the introduction of reform and opening-up three decades ago, thanks in no small measure to the contribution of migrant workers - more than 200 million at present.

China still enjoys an enormous "demographic bonus". Its working-age population increased after the family planning program brought down the proportion of children in the population. Laborers are still relatively abundant because the aging population has not yet peaked.

But China has to work out new policies on its demographic trends for at least the next 30 years, because its social and economic well-being depends on it.

Members of China's "baby boomers" generation will start retiring by 2015. The working-age population will reach its peak in 2020, totaling 940 million. China's population may reach 1.46 billion around 2035, after which it would start falling and be ultimately surpassed by India.

A rapidly aging population is certain to slow down China's economic progress, creating the demand for more highly skilled laborers, and high productivity and creativity to maintain economic growth and deal with the increasing expenditure on pension and healthcare.

But China's biggest asset will continue to be its labor during the next 30 years. Since China is expected to lose its demographic bonus in 2025, it needs to maintain its competitive advantage in labor. Skilled labor, however, will matter more than cheap labor in the long run.