How to deal with China’s severe population problem

By Xia Guohan Source:Global Times Published: 2018/8/15 19:18:40

Illustration: Peter C. Espina/GT

As a fast-developing country, China has long been under the spotlight over its population issue. Admittedly, China is confronted with a severe "population crisis," which demonstrates itself mainly in the following three aspects:

First, aging population. According to the definition of the United Nations, if the number of elderly people aged 65 and above accounts for more than 7 percent of the total population, the country becomes an aging society. In 2017, the number of Chinese aged 65 and above made up 11.4 percent of the total population, and those aged 60 and over made up 17.3 percent. It is a fact that China has an aging population.

Second, sub-replacement fertility. It is the combined result of low birth rate, unbalanced population structure, and unbalanced gender ratio. Unbalanced gender ratio further results in a series of problems: a decline in marriage rate, increase in divorce rate and celibacy, increasing average age at marriage, as well as the younger generation's falling desire to have a baby.

Third, uneven distribution of population. It is manifested in two aspects: on the one hand, the population is unevenly distributed in terms of geographical parameters - the southeastern coastal area has a larger concentration of the young population; on the other, educational resources are unevenly distributed, which becomes a major problem due to China's special binary structure of urban and rural areas.

To sum up, China is indeed undergoing a severe population crisis, yet we need not be too pessimistic. China will experience an extremely important transition in the next 10-15 years, and it is believed that the crisis will end during this period.

The strategic objective of future population development in China should follow a reasonable, sustainable growth, neither a "baby boom" nor extreme restriction.

First, it must be clarified that "family planning" is not the same as "one-child" policy. The "family planning" policy in the 1970s encouraged each couple to have one child, and the "two-child" policy implemented since 2016 was also part of family planning. China needs to immediately implement a pro-natal policy in a comprehensive way, rather than carry out the gradual reform like the "two-child" policy. Because in the context of homogeneous competition, population size determines the overall competitiveness of the country.

Second, while implementing a pro-natal policy, we should improve the quality of the population. The so-called demographic dividend includes four basic elements: population quantity, population structure, quality of labor force and the will to work. China's population policy should be aimed at maintaining the population quantity, optimizing the population structure, improving the quality of labor force and stimulating their willingness.

During the period of transition, the children of migrant workers need to be educated and the problem of basic education among rural children addressed. The potential of population dividend can be boosted by improving the quality of labor force and increasing their willingness without changing the population size and population structure temporarily.

Third, in the next 10-15 years, China will usher in another industrial revolution. The emergence of new technology applications such as artificial intelligence, automated robots and the Internet of Things will promote an overall upgradation of China's manufacturing industry. As a result, a large number of laborers in traditional labor-intensive industries will be replaced by artificial intelligence. At that time, more labor force will be transferred to the service industry, or even to the fourth industry (intelligent and creative industry). The above changes will certainly promote some social transformation, such as decreasing preference for boy child, thus alleviating the problem of unbalanced gender ratio.

Fourth, China's pension industry will inevitably shift from "family pension" to "social pension" in the future. With the increase in average life expectancy in China, the retirement age will gradually rise from 60 to 65 or even 68, which will to some extent ease the pension dilemma and spawn new industrial clusters.

Fifth, the promotion of the Belt and Road initiative will have an impact on China's population. For one, the pressure of demand on resources and food will be relieved; for another, with the implementation of new opening-up policies, China will gradually usher in an era of importing global talent, including both high-tech work force and immigrant workers, which will partly supplement China's "demographic dividend."

The author is a research fellow with The Charhar Institute.

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