Quality not quantity the key to tackling demographic shift

China has had a long time to think about what to do when the population dividend that drove its rise ran out. A discussion has finally been sparked at the highest level by the first national population decline in six decades, followed by the news that India became more populous at the end of April, according to a United Nations agency. The Covid-related economic slowdown, and now a sluggish recovery and a modest growth target, has helped focus the minds of leaders and policy thinkers.

One result has been a series of three consecutive editorials in the Communist Party’s mouthpiece, People’s Daily, under a pen name that means the voice of the central government, about the nation’s population strategy.

Population size and the birth rate still matter, but skill is becoming a more dominant part of the mix. In an age where China’s economy is increasingly driven by skilled workers, it has reached the stage where low-end, labour-intensive industry is going to be phased out.

The government now believes the thrust of concern about an ageing population must be refocused to include the grooming of a skilled labour force ahead of the age of artificial intelligence. It is convinced competition between countries will be decided less by how big the workforce but more by how skilled it is.

Size still matters, but it isn’t everything. That is why the party’s mouthpiece talks about building the world’s largest vocational programme targeted at producing 10 million skilled workers a year. After a decade that would be an economic force to be reckoned with.

In economic terms, India may be 20 years behind China. But demographically, India may look in better shape in terms of total numbers and average age, with more younger, able-bodied people.

But China has come to terms with the reality that to translate numbers into real strength in the long term, it needs education and organisation to mobilise its young people. That is to say young people can be a source of strength, but also a liability to social stability if not educated and organised to enable them to engage with the changing needs of future society. .

The People’s Daily editorials elaborate on President Xi Jinping’s vision on how China should tackle its ongoing demographic shift, which includes a rapidly ageing society and a falling birth rate, during a recent meeting with top officials.

Apparently, for China, it all comes down to replacing a declining population dividend with a talent dividend, through building on the education levels and health of its population to create a reserve of skill geared to technology for growth, rather than labour-intensive manufacturing. This strategy is headed in the right direction.