The Financial Express

Demographic challenges for China in the coming decades

| Updated: October 22, 2017 19:52:53

Evaly and Fianancial Express Evaly and Fianancial Express
Demographic challenges for China in the coming decades

Stretching over a massive landmass of over 9.5 million square kilometres, China currently has a population of around 1.39 billion which is 50 million more than the next most populous country India (1.34 billion). The third most populous country - the USA has a much smaller population of around 325 million. Comprising 22 provinces, 5 autonomous regions, 4 directly controlled municipalities and 2 self-governing special administrative regions of Hong Kong and Macau, the People's Republic of China (PRC) also claims Taiwan as its 23rd province. The official population statistics for PRC, however, exclude the figures for Hong Kong, Macau and Taiwan. On the other hand, PRC is ranked 81st in the world in terms of population density, with 145 inhabitants per square kilometre or 375 persons per square mile. Although the country has 56 officially recognised ethnic groups, over 90 per cent of the population belong to the Han ethnicity. It, however, has one of the most skewed male-female population ratios in the world with around 115 males for 100 females -- past official measures and prevailing social norms contributing much to this imbalance.  
GENESIS AND BACKGROUND: Since its inception in 1949, the PRC government led by the Chinese Communist Party encouraged people to have many children in order to increase the country's workforce. Mao Zedong, the founder of the People's Republic, wanted as many Chinese in the world as possible. But his radical pro-growth policies were unsustainable, and towards the end of his life in the 1960s, Beijing's technocrats adopted the mostly voluntary "wan, xi, shao"-"late, long, few"-programme to limit population growth. These efforts were largely effective, with the birth rate falling by half in less than a decade. But by the decade of 1970s, the Chinese leaders once again felt that the prevailing rates of population growth would become unsustainable very soon. 
Mao's successor Deng Xiaoping was not satisfied with the existing situation. He, therefore, rolled out the one-child policy, often termed the world's most draconian social experiment. It decreed that the Chinese couples could only have one child. Those who adhered to this rule were offered benefits like increased access to education, better healthcare and childcare, cash bonuses and better access to housing. Those who did not comply were fined and deprived of benefits. Resistance was particularly observed in the rural areas where people traditionally had large families. Therefore, while the policy could be strictly enforced in the urban areas, remote rural regions were harder to control. 
As a result of this massive campaign to enforce the one-child policy, the population growth rate in China has continuously fallen. It proved so successful that the current birth rate of 1.4 children per woman even fell below the replacement rate of 2.1 children per woman. There have also been some negative impacts, such as a skewed population in terms of gender due to the traditional preference for boys. It was reported in 2000 that 90 per cent of the foetuses aborted in China were females. 
Because of the emerging realities, the one-child policy was relaxed since 2000, whereby couples, especially in rural areas, could apply for a second child if the first child was a girl. It was finally replaced by the two-child policy in 2016, allowing couples in both rural and urban areas to have two children.. 
PRESENT STATUS: The amendment of the one-child policy in early 2016 to permit all Chinese families to have two children helped raise the number of births in China to 18.46 million during the year 2016, the highest increase since 2000, but fertility rate still remains below the replacement rate that allows a population to naturally replenish itself from one generation to another. The new births were also lower than the projected figure of 20 million. The National Population Development Plan 2016-30 released by the country's cabinet - the state council -warned that China faced a turning point particularly between 2021 and 2030. There will be accelerated aging of population, which would put additional pressure on social security and public services. Side by side, the shrinking of the working-age population will damage economic growth and reduce the tax income needed for supporting the elderly. 
The National Population Development Plan 2016-30 has predicted that 25 per cent of China's population will be over 60 in 2030, compared to about 16 per cent in 2015. Conversely, the working-age population (15-59 years) will be 80 million less than the figure in 2015. According to this report, China's population is expected to peak in 2030 by reaching 1.45 billion.
FUTURE CHALLENGES: In the backdrop of the above-mentioned realities, as China's Baby Boomers reach retirement age in the coming decades, the country will make a transition from having a relatively youthful population and abundant workforce to a population with much fewer people in their productive prime. Some figures put forward by relevant experts will demonstrate the frightening possibilities of this demographic decline. Today, China roughly boasts of 5 workers per retiree, but this ratio will collapse to 1.6 workers per retiree by 2040. That would put China in the category of older societies of the world with people older than 65 years rising to 329 million from a mere 100 million in 2005. The consequences of these demographic changes for China's economy are enormous. With less people now entering the workforce than exiting it, the demographics have already become a drag on its growth. 
Many demographers also do not expect the two-child reform to make much of a dent. As in many other parts of the world, various forces including rising wages and increasing female workforce participation in China over several decades have left women disinterested to spawn large families. In fact, China's fertility rate was declining even before the one-child restrictions were imposed in 1979. Single-child households have now become the norm in China, and few parents believe they can afford a second child, particularly in the urban areas. In addition, many men will not be able to become fathers at all, as a preference for sons under the one-child policy led to large-scale abortion of female foetuses. Consequently, China is projected to have 30 million more grown up bachelor males than single women of similar age by 2020.  It has even been predicted by some experts that the social and fiscal pressures created by aging in China in another decade or two may lead to a mounting need to attract immigrants, which is at present considered quite inconceivable. 
As China's population is about to peak and then shrink, a shrivelling population would require the government to overcome demographic trends rather than be propelled by them, as has been the case since the founding of the PRC. The number of working-age Chinese fell for the first time in 2012, according to the government's National Bureau of Statistics. This development is the outcome of plunging fertility rate or the number of births per woman per lifetime. China had a total fertility rate (TFR) of 5.9 in the beginning of the 1970s, which is now officially claimed to be around 1.5. In reality, it may even be as low as 1.4 or 1.3, experts opine. In any case, China is now well below the 2.1 percent population growth rate required to maintain a constant population. It now resembles Western Europe, Japan and South Korea more and more in this area.
The problem of low fertility has been compounded by the growing scarcity of females. As an outcome of the one-child policy and a traditional social bias for male children, today China probably has the world's most skewed sex ratio at birth, 115.9 boys for every 100 girls born, whereas the ratio of 106 boys to 100 girls is not exceeded in most countries of the world. As a consequence of this imbalance-there are now 33.8 million more men than women, according to official statistics. Apart from gender imbalance, the continuation of the one-child police for so long has also caused other demographic abnormalities, such as the almost complete disappearance of aunts, uncles, and cousins in the domain of families. 
Alarmed by the demographic trends, the Chinese government progressively relaxed the one-child policy over time. Before its replacement by the two-child policy in 2016, the last major change was announced in November 2013, when additional couples were allowed two children. But those liberalisations proved to be too little and too late for averting a demographic crisis, which now appears to be virtually inevitable. As Nicholas Eberstadt of the American Enterprise Institute wrote over five years ago, "These problems will compromise economic development, strain social harmony, and place the traditional Chinese family structure under severe pressure; in fact, they could shake the Chinese civilization to its very foundation."
All these can have profound socio-political ramifications. "Bare branches," for instance, were responsible for domestic turmoil throughout the dynastic history of China. The last among the dynasties, the Qing dynasty was partly ruined due to the consequences of sex-ratio imbalances. In their famous but controversial book 'Bare Branches: The Security Implications of Asia's Surplus Male Population', Valerie Hudson and Andrea den Boer wrote, "China, it seems, is re-creating the vast army of bare branches that plagued it during the 19th century." They also argued that such male-female imbalances impede democratisation, as "High-sex-ratio societies are governable only by authoritarian regimes capable of suppressing violence at home." The author of 'The Structure of Chinese Population' Li Jianxin also claimed that there were "shadows of surplus males" behind the incidents of mass-violence during the first decade of the 21st century that might magnify the challenges of maintaining social stability. It has also been suggested by some Chinese officials that single children were one of the causes of a juvenile crime wave.
Rapid demographic changes are also occurring along China's borders in East Asia. The Japanese, for example, has a low total fertility rate (TFR) of 1.4, which is matched by similar TFRs in South Korea (1.3) and Taiwan (1.1), as well as China's two special administrative regions of Hong Kong (1.2) and Macau (0.9). But in spite of a slightly higher TFR, Japan is further along the demographic curve than its neighbours, and will eventually become the "the oldest society the world has ever known" by 2050.  But the neighbouring countries including China will not be far behind, and they are all headed towards an almost simultaneous demographic collapse unprecedented in world history.
The countries of South Asia, however, present a different picture. The populations of Pakistan and Bangladesh are growing fast, but the big concern for China is its competitor India, who has an estimated TFR of 2.5. Based on the current trend, India will overtake China as the world's most populous state within the next ten years, a status China has held for at least the past three centuries. And in the years that follow, Indian population will continue to grow rapidly while China moves in the opposite direction. India's workforce is also poised to overtake China's by 2025-30. By the middle of the current century, around 1 billion Indians will be of working age, surpassing China by at least 130 million in the same age-category. The median age of the Indians around 2050 will be a young 37, against an aging China's 46. People 65 years and above will comprise 23.9 percent of the Chinese population but only 12.7 percent in India. 
A deteriorating demographic profile will undoubtedly undermine the course of the fast-growing Chinese economy over the long run. China's magnificent economic growth since the 1980s coincided with the 'demographic dividend' enjoyed by the country, an "extraordinary bulge in the workforce created by boldly imagined and rigorously enforced population policies". It is not yet clear whether the Chinese government and its technocrats will be able to devise and maintain a consistent and sustainable rise in GDP while its population settings and demographic trends continue to deteriorate. 
Dr. Helal Uddin Ahmed is a retired civil servant and former editor of Bangladesh Quarterly, presently in Beijing with a Confucius Institute Fellowship. 
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