The interplay between people and economy is also an interplay between population and economic growth. The two are not linearly coupled, but are noticeably dependent on one another.
China’s population shrank last year for the first time in 60 years, nine years earlier than the government had forecast, according to the National Bureau of Statistics. The fertility rate (births per woman) fell to 1.0 to 1.1, well below the official forecast of 1.8. …. the number of births fell sharply, reaching 9.56 million, the lowest level since 1790, despite China moving to a two-child policy in 2016.
There are various reasons for this demographic crisis. The one-child policy, enforced for 36 years, has irrevocably changed attitudes towards childbearing and the family. Having a child or not having a child has become the societal norm. Dhe country’s infertility rate has risen from 2 percent in the early 1980s to 18 percent in 2020.
From 2013 to 2021, the number of first-time marriages fell by more than half, and by as much as three quarters among 20- to 24-year-olds. The younger the Chinese women’s birth year, the less likely they are to have children. A recent survey found that the average number of planned children for women in China is 1.64, while it is 1.54 for women born after 1990 and 1 for women born after 2000 .48 decreases.
The author compares this to South Korea and Hong Kong. There they planned with an average number of children of 1.92 and 1.41 respectively. However, the real fertility rates are only about half as high as the planned figures. In South Korea is therefore e.g. B. Fewer than one child born per woman. The drama does not only concern dictatorships:
South Korea broke its own record for the world’s lowest fertility rate. Last year the number of babies a woman can expect to have during her lifetime dropped to 0.78 from 0.81. The rate required for the population to remain stable is 2.1. By 2100 the country’s population is expected to fall by 53% to 24m. It is the fastest-shrinking population among rich economies.
In the NZZ, Yi Fuxian draws conclusions for China and says the country will have difficulties stabilizing its birth rate at 0.8. Which means its population will drop to less than 1.02 billion people by 2050 and 310 million by 2100.
The Chinese (one-child) policy has strongly influenced the economic structure and the distribution of resources in the country.
Chinese household disposable income is just 44 percent of gross domestic product (GDP), compared to 72 percent in the US and 65 percent in the UK. The Chinese housing market was valued at 4 times the country’s GDP in 2020, while the US real estate market is valued at 1.6 times the country’s GDP.
The cost of raising children is dramatically high. All of this is a complex dilemma for politicians. In the housing bubble, families cannot afford to raise two children. But the bubble bursts
China’s economic growth will slow, which in turn will lead to a global financial crisis. At the same time, increasing household disposable income to 60 to 70 percent of GDP to boost the birth rate could reduce the government’s power and undermine the economic foundations of its current “authoritarian at home and aggressive abroad” policy approach.
One could now adopt Japan’s measures to reduce child-rearing costs, such as reducing school fees, suitable childcare, post-natal benefits and rent subsidies.
But Japan’s approach has proved expensive and ineffective: the country’s fertility rate rose temporarily from 1.26 in 2005 to 1.45 in 2015, before falling back to 1.23 in 2022.
In addition, China has the problem that it grows old before it is really rich. So the means are much more limited than in the earlier industrial nations. Their ways are therefore not easy to imitate. Dhe rapid aging of the population will slow down Chinese growth early on and increase public debt. Fewer and fewer young, able-bodied citizens have to “take care of” older people.
The proportion of Chinese aged 65 and over will increase from 14 percent in 2020 to 35 percent in 2050. While in 2020 there were five workers aged 20 to 64 for every person aged 65 and over, this proportion will fall to 2.4 workers by 2035 and to 1.6 workers by 2050.
The author rightly fears that the pension crisis in China could develop into a humanitarian catastrophe. The global actions of the Chinese leadership seem all the more incomprehensible to me. Does Xi Jinping not know the numbers, does he not want to see them, does he want to distract attention from the problem? Or does he want to quickly cement China’s status as a great power before things go downhill?