Looming demographic shock requires quick action

By Liu Qingbin Source:Global Times Published: 2018/8/19 21:28:40

Illustration: Xia Qing/GT



 

The new Chinese zodiac postage stamp issued by China Post, depicting a happy pig family with three piglets, has stirred discussion about whether the family planning policy will be abolished.

It would be a big step within just three years to go from allowing couples to have two children to having three or more. Signs here and there, however, have led to the anticipation that this policy change is in the pipeline.

The National Health Commission used to strongly oppose the second-child policy, stating that loosening controls would mean 90 million more people, taking the total population near the red line of 1.5 billion and putting pressure on the economy and society.

However, according to National Bureau of Statistics' data in January, there were only 17.2 million births in 2017, far less than the estimated 50 million. The idea that the second-child policy would cause a baby boom proved wrong.

Moreover, births in 2017 were 630,000 less than in 2016. The number of second-borns in 2017 was 1.6 million more than in 2016, meaning that the number of first-borns decreased by 2.3 million. It shows that the younger generation is reluctant to have children. Worse, the number of women of children-bearing age in China will fall by 40 percent over the next decade.

If the willingness to have children continues to decline, the number of births will fall by 300,000 to 1 million yearly since 2018. The demographic turning point could come between 2021 and 2015, one expert reckons.

The Japanese experience has shown that the population peak arrives 10 years after the size of the labor force has reached its climax. In the case of Japan, 1995 was the labor force peak -10 years later, its total population started to go down. After a brief comeback in 2006, the down trend continued and even picked up speed.

Japan's total fertility rate was generally higher than that of China. However, it is commonly believed that China has many unregistered people, so the actual population size and number of new births are perhaps higher than the official figures.

But policymakers and experts did not prepare for China's population to peak so early. The data from January suggests something different: the unregistered population has little influence on the overall trend. China's labor force peaked in 2012. Although the second-child policy has taken effect, by 2022-2025, China's population will still reach a peak. Even if every couple is allowed to have three children, the influence will be limited.

The demographic turning point can only be postponed for another few years. But a few years means a lot. The demographic turning point will mark the end of economic growth driven by the demographic dividend. If the economic growth model does not have a radical change before that point, China's economy might climb down.

Therefore, policy adjustments to postpone the turning point need to be undertaken to buy time for an economic transformation. Otherwise, the situation will become difficult. In particular, the Han ethnic group will reach the tipping point next year if the number of births keeps falling.

Policymakers in China have faced up to the previous false predictions and policy fallacies, but it's not enough. The economic and social shock of the demographic turning point does not get their attention. Japan has become a society without inspiration since its population started to contract in 2007. Young people feel hopeless about changing their fates and improving their futures. The gap between the rich and poor is ironically getting larger.

Today's Japan could be tomorrow's China. Being prepared means having the will to end the nation's family planning policy.

The author is a research fellow with The Charhar Institute. bizopinion@globaltimes.com.cn



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