Why China’s shrinking population is such a big deal – calculating the social, economic and political costs of aging a smaller society

ive here. Articles like this mad. They take the view that demographic growth is necessary, when the world population was largely static before the Industrial Revolution. Moreover, given the limited natural resources, it will be the duty of developed and middle-income economies to adjust to non/negative population growth. It was also no secret that China was experiencing a coming demographic crisis, so its finally arrival should not be treated as disturbing news.

Indeed, the results of the US Census in 2000 were a surprise. Demographers were expecting the United States to show little or no population growth. They did not allow a large influx of immigrants, and then higher birth rates of Hispanics.

The article curiously illustrates how China might adapt. It acts as if a manufacturing-orientated economy is a passive thing. Your humble blogger pointed out that many customers and contacts said they sent manufacturing overseas even though the economic situation was weak (and remember, the supposed advantage was cheap labor). They could have made the cost savings domestically, but the fad was spilling over overseas and no one wanted to look like an administrative dinosaur.

So if China has labor-intensive activities (likely less than stereotypes; China has been moving up the value chain for more than a decade), then more automation could address the growing labor scarcity and costs. Other ways are to encourage more people to work beyond the normal retirement age, even if part-time, and of course to bring in immigrants.

Indeed, thanks to Covid, the United States may be closer to China’s fate than we think. IM Doc quoted a story that reported that there were more births in his state than deaths from July 2021 to July 2022 according to US Census data. This is the first time this has happened since his country started keeping such information. 23 other states reported more deaths than births over that period, and the United States as a whole showed an increase of just 0.4%, including 1 million immigrants. Our trusted calculator says that 4% of a population of 331.9 million is 1.33 million. So the population growth in the United States is accelerating at a halt.

As noted by IM Doc:

The article states that 23 states have similar numbers of deaths and births. Not exactly how it was presented yesterday [in an online Grand Rounds discussion] – “So far 24 states have reported their numbers – and every state reported so far has the same – birth rate is down – all cause deaths are very high.”

What worries the epidemiologist who was talking to us yesterday is that the actual relative rate in each case of deaths and births is roughly the same number in all reporting countries. This wouldn’t be expected in any kind of infectious disease problem – or at least never in history – they tend to be more widespread. No – this is something else – something external.

As I’ve been telling you all for months – there are huge issues with young women – and with miscarriages – finally the numbers are coming in to make me realize I’m not losing balls. The ICD-10 codes for primary amenorrhea and for mid-third-trimester miscarriage are historical patterns. The fact that there is a sudden decrease in the number of sperm and their motility has also been mentioned by fertility clinics. None of these things are grouped consistently at the federal level – so this is sometimes like the blind leading the blind….

All causes of deaths — estimated to be around 5-10% COVID-related — and that’s a stretch — most of the COVID deaths for 2021 and 2022 were from older patients near the end anyway. No – it seems to be because ICD codes for pulmonary embolism, acute coronary syndromes, sudden cardiac death, strokes, suicide, drug OD, various types of cancers – and the cancers that go up very high are leukemia , lymphoma, myeloma, solid endocrine and neuroendocrine tumors …

It will be interesting to see the numbers from all the other states that haven’t responded yet.

We have emphasized over and over again that this was completely unprecedented and deeply troubling. The fact that this is happening in several other countries is very worrying.

Guys, I am deeply concerned about what I see and hear. We are beginning to experience severe manpower shortages in almost every industry. Just getting a plumber is a weeks-long ordeal. And just from my observation, we don’t seem to have as many people sitting around living on government handouts as presented in the media.

Shorter: The basic assumption of this piece, that the United States is in a vastly different demographic position than China, may be inaccurate.

By Feng Wang, Professor of Sociology, University of California, Irvine. Originally published in The Conversation

For most of recorded human history, China boasted the largest population in the world—and until recently, by some margin.

So the news that the Chinese population is now in decline, and that it will be overtaken later this year by India, is big news even if it was long expected.

As a researcher of Chinese demographics, I know that figures released by the Chinese government on January 17, 2023, showing that for the first time in six decades, deaths in the previous year outnumbered births are not just a blip. Whereas that previous year of recession, 1961—during the Great Leap Forward economic failure, in which an estimated 30 million people died of starvation—represented a deviation from that trend, 2022 marks a turning point. It is the beginning of what is likely to be a long-term decline. By the end of the century, the Chinese population is expected to shrink by 45%, according to the United Nations. And that is assuming that China maintains the current fertility rate at around 1.3 children per couple, which may not happen.

This decline in numbers will spur a trend that has demographers in China worried: a rapidly aging society. By 2040, a quarter of China’s population is expected to be over 65 years old.

In short, this is a seismic shift. It will have huge symbolic and substantive effects on China in three major areas.

Economie

In the span of 40 years, China has largely completed a historic transformation from an agricultural economy to one based on manufacturing and the service industry. This has been accompanied by a rise in the standard of living and income levels. But the Chinese government has long recognized that the country can no longer rely on the labor-intensive economic growth model of the past. Technological developments and competition from countries that could provide a cheaper labor force such as Vietnam and India have made this old model largely obsolete.

This historic turning point in China’s demographic trend serves as a wake-up call to move the country’s model more rapidly into a post-industrial, post-industrial economy – an aging and shrinking population is no match for the purposes of a labor-intensive economy. Model.

As for what that means for China’s economy, and for the world’s economy, a declining population and an aging society will certainly provide Beijing with short- and long-term challenges. In short, this means that there will be fewer workers able to fuel the economy and spur more economic growth on one side of the ledger; On the other hand, a growing post-work population will need potentially costly subsidies.

It is perhaps no coincidence, then, that 2022, as well as being a pivotal year for China in terms of demographics, also saw one of the worst economic performances the country has seen since 1976, according to data released on January 17.

Society

The growing proportion of elderly people in China’s population is more than just an economic issue – it will also reshape Chinese society. Many of these elderly people only have one child, due to the one-child policy in place for three and a half decades before it was relaxed in 2016.

The large number of elderly parents with only one child they depend on for support is likely to be severely restrictive – not least for elderly parents, who will need financial support. They will also need emotional and social support for a longer period as a result of their longer life expectancy.

It would also place restrictions on those same children, who would need to fulfill their professional obligations, simultaneously provide for their children and support their aging parents.

It is the responsibility of the Chinese government to provide adequate health care and pensions. But unlike Western democracies that have now had many decades to develop social safety nets, the speed of demographic and economic change in China means that Beijing is struggling to keep up.

With the Chinese economy growing rapidly after 2000, the Chinese government responded by investing heavily in education and healthcare facilities, as well as expanding universal pension coverage. But the demographic shift has been so rapid that it has meant that policy reforms to improve the safety net have always been playing catch-up. Even with the massive expansion of coverage, the country’s healthcare system remains largely ineffective, unevenly distributed and inadequate given the growing need.

Likewise, social pension systems are highly fragmented and unevenly distributed.

Policy

How the Chinese government responds to the challenges posed by this dramatic demographic shift will be key. Failure to live up to the public’s expectations in its response could spell crisis for the Chinese Communist Party, whose legitimacy is closely linked to economic growth. Any economic downturn could have dire consequences for the Chinese Communist Party. It will also be judged on how well the country can reform its social support system.

Indeed, there is indeed a strong case to be made that the Chinese government has moved too slowly. The one-child policy that played such a significant role in slowing, and now declining, population growth has been government policy for more than three decades. It has been known since the 1990s that China’s fertility rate was too low to maintain current population numbers. However, it was only in 2016 that Beijing acted and relaxed its policy to allow more couples to have a second child, and then in 2021 a third.

This measure to stimulate population growth, or at least slow its decline, came too late to prevent China from soon losing its crown as the largest country in the world. However, a loss of status is one thing, and the political impact of any economic downturn caused by a shrinking population is quite another.

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