Article

China faces the prospect of a greying, declining population, leading to fears for its economic growth and public finances. Its population is projected to peak within a decade, as average fertility rate is well below the replacement rate of 2.1. The recent relaxation of population controls may not be sufficient to turn the tide, as precedents from neighbouring in Hong Kong, Macao, South Korea and Japan indicate the strong possibility of voluntarily low fertility rates in an more urbanized, economically developed future.

According to the World Bank, China’s total fertility rate fell from 2.7 in 1980 to 1.7 in 2012. Interestingly, the World Bank’s figures show the total fertility rate in China has recently increased slightly from a low of 1.5 in 2000. Xénia Melo and Pascal Rocha da Silva of the University of Geneva project China’s population to peak around 1.375bn in 2023, before starting a slow decline to roughly 1.26bn by 2050.

A brief history lesson is needed to understand how China came in to its current demographic situation. After the foundation of the People’s Republic in 1949, Mao Zedong encouraged Chinese couples to have as many children as possible, saying “Even if China’s population multiplies many times, she is fully capable of finding a solution; the solution is production…Of all things in the world, people are the most precious.” A large population was seen as a means of enhancing China’s power on the world stage. Secretary of the Communist Youth League Hu Yaobang boasted “The force of 600m liberated people is tens of thousands of times stronger than a nuclear explosion.”

In the post-Mao era the Chinese government has taken a different track on population control. These new efforts have been called the “One Child Policy” outside China – although this is something of a misnomer, as strict restrictions on having one child applied only to ethnic Han Chinese living in the cities. In 2007 Yu Xuejun, spokesman of the National Population and Family Planning Commission claimed that only 35.9% of the Chinese population was restricted to having just one child. Even ethnic Han in the cities can have more than one child if they pay a fine based on their income – the largest such fine being over $1.2m for filmmaker Zhang Yimou.

In recent years the Chinese government has further relaxed population control restrictions. In 2013 most provinces scrapped requirements for a mother to wait until after 30 if before having a second child. There have also been reforms allowing couples to have two children if both the mother and the father are themselves only children.

Official relaxation of family planning policies appear to stem primarily from concerns about the economic costs of an aging population. Many economists speak of a “demographic dividend” – a period of growth when a large segment of a country’s population is of working age. This period may be coming to an end for China. Professor David Bloom of Harvard University’s School of Public Health warns that China’s aging population will have dramatic effects on its economy, as there will be a lower ratio of workers to support the population of retirees: “China is about to go over the demographic cliff and the rapidity of the aging in China is quite astonishing.”

Professor Andrew Mason of the University of Hawaii recently undertook a detailed study of the economics effects of the demographic shift. As he explained to China Outlook: “Research teams in 40 countries participated in this study including Li Ling and Qiulin Chen at CCER [China Center for Economic Research] and CASS[Chinese Academy of Social Sciences], respectively. The study was published in Science last month and you can find out more about it on our website. The analysis is based on a very detailed set of accounts that measure all economic flows across age and can be used to estimate the cost of children and the elderly and who is bearing this cost. Based on this research we find that many countries including China have birth rates that will be a problem for public finances. This is because governments provide very substantial support in terms of pensions and health care spending for the elderly. … Public sector revenues will also suffer as the working age population declines.”

Despite these concerns, Professor Mason explained that not all the effects of demographic shift are negative: “This [negative impact] may be offset to a significant degree, however, to the extent that future smaller cohorts are much more educated than larger cohorts in the past. People are having fewer children but they and their governments are investing more in each child.Children are very costly to parents (and grandparents) and they generally can realize higher standards of living when they have fewer children. With lower fertility, investment can be diverted to raising standards of living. Where does China stand in all of this? Our view would be that a total fertility rate of around 1.7, give or take a few tenths, is generally favorable to standards of living. Fertility rates in the 1.5 to 1.9 range should not be a matter of concern.”

In addition to economic concerns, there are fears about the social consequences of top-down family planning. China’s family planning effort has seen many instances of forced abortion and sterilization. Furthermore, deep reverence for male heirs has inspired many parents to have gender-selective abortions. Normally, there are roughly 105 boys born per 100 girls, but according to official statistics in China this figure currently stands at roughly 117.6 boys per 100 girls (down from a peak of 120 in 2004). A skewed gender ratio has also been linked increased social strife and even the potential for greater violence and political unrest.

Policy changes to family planning restrictions may be coming too late to avert a demographic decline, as many couples are voluntarily choosing to have one child or none at all. World Bank statistics show China’s urban population booming from just 19% in 1980 to 53% today, and the shift from farm to city is driving many people voluntarily to limit the number of children they have.

This development is similar to historical examples from the greater Sinosphere. Hong Kong, Macao, and Singapore have amongst the lowest fertility rates in the world – significantly lower than mainland China – despite having no official restrictions on the number of children that couples are allowed to have. Fertility in nearby South Korea, Japan, and Taiwan is also well below the replacement rate of 2.1.

Most Western countries rely on inward immigration to avoid the potential economic and social problems of demographic decline, and there may be some potential for China to follow a similar strategy. Several hundred thousand undocumented workers have come from Vietnam to China in search of higher wages, and up to 200,000 Africans live in the southern Chinese city of Guangzhou. There are over 685,000 foreign citizens officially residing in China. However, these numbers pale in comparison with the estimated 9.34m people born in mainland China who now live in other countries.

Part of the problem of addressing China’s demographic challenges is a lack of awareness. Most Chinese are primarily concerned about dealing with the effects of overpopulation. An article on the website of the National Health and Family Planning Commission sought to mollify concerns that allowing more couples to have two children could put strain on the country’s resources, rather than addressing the potential issues of an aging population.

However, there is an increasing awareness of the potential issues arising from low fertility, especially in academia. Liang Zhongtang, a demographic specialist with the Shanghai Academy of Social Sciences’ School of Economics, has warned “China’s fertility rate has become extremely low. We cannot achieve a normal fertility rate even if the government encouraged having children, let alone continuing to limit it.”

the extent of China’s population crisis has not yet sunk in to the general population, many of whom continue to believe that China’s main problem is not too few people, but too many. They are due for a reality check before too long.