Hong Kong is facing a number of significant demographic challenges. An ageing population will lower our labour force participation rate. In the past three decades, our economy has grown by an average of 4.1% per year. Of this, about 1% was due to a growth in the labour force while the other 3% was from productivity gain. Insufficient labour will slow down economic growth. On the other hand, an ageing population will increase the expenditure of healthcare and elderly welfare and services. Slower economic growth coupled with increased expenditure will affect the sustainability of public finances.