In China, ‘a long-term time bomb’
Drop in births, aging population threaten economic growth
By Sui-Lee Wee
China’s population is growing at its slowest pace in decades, with a plunge in births and a graying workforce presenting the Communist Party with one of its gravest social and economic challenges.
Figures from a census released this week show that China faces a demographic crisis that could stunt growth in the country, the world’s second-largest economy. China has long relied on an expanding and ambitious workforce to run its factories and achieve Beijing’s dreams of building a global superpower and industrial giant. An aging, slow-growing population — one that could even begin to shrink in the coming years — threatens that dynamic.
China’s aging-related challenges are similar to those of developed countries like the United States. But its households live on much lower incomes on average than in the United States and elsewhere.
In other words, China is growing old without first having grown rich.
“Aging has become a basic national condition of China for a period of time to come,” said Ning Jizhe, head of China’s National Bureau of Statistics.
While most developed countries in the West and Asia are also getting older, China’s demographic problems are largely self-inflicted. China imposed a one-child policy in 1980 to tamp down population growth. Local officials enforced that policy with sometimes draconian measures. It may have prevented 400 million births, according to the government, but it also shrank the number of women of childbearing age.
China’s population has now reached 1.41 billion people, according to the census, which was taken last year. Since the previous census, in 2010, China’s population grew by 72 million people.
That increase is larger than the population of Britain or France, but in percentage terms it is the smallest increase recorded since the Chinese government conducted its first census, in 1953.
A dearth of new births suggests that the trend will continue. Only 12 million babies were born in China last year, according to Ning, the fourth year in a row that births have fallen in the country. That makes it the lowest official number of births since 1961, after a widespread famine caused by Communist Party policies killed millions of people, and only 11.8 million babies were born.
China’s population dynamics could compel Xi Jinping, the country’s top leader, to reckon with the failings of the ruling Communist Party’s family planning policy, which for decades was one of the country’s biggest sources of public discontent. If the trend continues unabated, it risks complicating Xi’s “Chinese dream,” a pledge of long-term economic prosperity and national rejuvenation on which he has staked his legacy.
Beijing is now under greater pressure to abandon its family planning policies, which are among the world’s most intrusive; overhaul an economic model that has long relied on a huge population and a growing pool of workers; and plug yawning gaps in health care and pensions.
“China is facing a unique demographic challenge that is the most urgent and severe in the world,” said Liang Jianzhang, a research professor of applied economics at Peking University and a demography expert. “This is a long-term time bomb.”
The new population figure puts the average annual growth rate at 0.53% over the past decade, down from 0.57% from 2000 to 2010. This puts China on course to be surpassed by India as the world’s most populous nation in the coming years.
Demographers say there are no easy fixes.
A growing cohort of educated Chinese women are delaying marriages, which have declined since 2014. China is not willing to rely on immigration to boost its population. The divorce rate has risen consistently since 2003. Many millennials are put off by the cost of raising children.
The data released Tuesday pointed to the impact of such concerns.
China’s total fertility rate — an estimate of the number of children born over a woman’s lifetime — now stands at only 1.3, according to Ning, well below the replacement rate of 2.1.
Ning said births last year were lower in part because of the uncertainty caused by the pandemic. He acknowledged that government policies affected fertility but said that improved living standards and changing social attitudes were playing an increasingly important role, as they have elsewhere.
“Low fertility has become a common problem faced by most developed countries, and it will also become a practical problem facing our country,” Ning said.
The population is also aging rapidly. People older than 65 now account for 13.5% of the population, the census showed, up from 8.9% in 2010.
When it was younger, that population was one of China’s greatest strengths.
As the population gets older, it will also impose tremendous pressure on the country’s overwhelmed hospitals and underfunded pension system. China also continues to grapple with a huge surplus of single men that has driven problems such as bride trafficking, an unintended consequence of its family planning rules.
These trends are proving difficult to reverse.
Three decades after the one-child policy was introduced, attitudes about family sizes have shifted, with many Chinese now preferring to have only one child.
In the decades to come, Beijing will face the difficult task of maintaining strong economic growth — and staying globally competitive — as the labor pool shrinks.
“China’s economy might not in the foreseeable future overtake that of the U.S. as the largest economy,” said Julian EvansPritchard, a senior China economist at Capital Economics, a research firm. “And the key reason for that is demographic differences.”
China is also maturing far more quickly than most countries, a rate that is rapidly outpacing the government’s meager investments in health care and social services catering to an older population. A central challenge for Beijing is how to help the country’s younger generation care for the swelling ranks of retirees. People younger than 14 made up 18% of the population, up only slightly from 17% 10 years ago.
The government wants to raise the retirement age, among the world’s lowest at 60 for men and 50 for most women, to ease pressure on the underfunded pension system. China’s main state pension fund, which relies on tax revenues from its workforce, risks running out of money by 2036 if policies remain unchanged, according to research commissioned by the party.