Commentary: China’s fertility crisis could kill its economic dynamism

SHANGHAI: Historically, demographics has been a slow-moving variable. But the East Asian economies – particularly China, Japan, and South Korea – have flipped so quick from speedy inhabitants progress to say no that they virtually have whiplash.

As a deliberate economic system, China was as soon as obsessive about increasing its inhabitants. But, in 1957, the economist Ma Yinchu revealed The New Theory of Population and cautioned that this pattern would quickly start to undermine China’s economic improvement. 

Though the federal government initially criticised his idea unfairly, Chinese leaders ultimately took his warnings to coronary heart, encouraging household planning as a solution to promote economic progress.

In 1973, China went a step additional, with the nationwide wan, xi, shao (late marriage, longer spacing, and fewer kids) marketing campaign, which inspired {couples} to have not more than two kids. 

Six years later, this escalated into the notorious one-child coverage. To guarantee its long-term impression, household planning was lastly written into the Chinese structure in 1982. 

The fertility price plummeted. By the mid-Eighties, it hovered above the so-called substitution degree of two.1, in comparison with 6.0 within the Sixties and Seventies. 

In the Nineteen Nineties, the fertility price fell to only 1.2 to 1.3 – a degree that promised to hasten the nation’s demographic ageing considerably. 

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The authorities nonetheless continued to implement the one-child coverage till 2016, when, lastly, it shifted to a two-child coverage.

With that, China’s fertility price bounced again considerably, reaching 1.58 in 2017, based on the National Bureau of Statistics. But it’s now once more on a downward slide, falling from 1.49 in 2018 to 1.47 in 2019. 

According to the inhabitants economist James Liang, it could be set to return to Nineteen Nineties ranges.


As Liang famous, in 2017, the full fertility price of 1.58 mirrored a fertility price of 0.67 for one-child households, 0.81 for two-child households, and 0.11 for three-child households.

China began to phase out its one-child policy in 2015 in response to concerns about an ageing

China started to part out its one-child coverage in 2015 in response to issues about an ageing inhabitants and shrinking workforce (Photo: AFP/STR)

The incontrovertible fact that the fertility price of two-child households is greater than that of one-child households displays the two-child “accumulation effect” – that’s, one-child households who had beforehand needed to have a second little one lastly having the ability to have one.

Before lengthy, that impact will definitely dissipate, and the full fertility price will shortly drop to 1.2, placing China in the identical place as Korea and Singapore, and presumably behind the United States.

This view is supported by pre-2016 beginning tendencies. In 2010, the one-child beginning price stood at 0.73. While it rose barely in 2011 to 2013, it fell to 0.72 in 2014 and 0.56 in 2015.

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Given that one little one was all the time allowed, the overwhelming majority would have been registered, which means that these fertility-rate figures for one-child households are unlikely to be underestimates.

Overall, there have been fewer than 18 million births yearly during the last decade, in comparison with 25 million to 30 million through the peak years. In 2019, China registered solely 14.65 million newborns.

Last yr, that determine dropped to 10.03 million – practically a 15 per cent decline, yr on yr. Although the sharp decline in births in 2020 might nicely have mirrored the impression of the coronavirus pandemic, the downward pattern is evident. 

China’s quickly declining fertility displays the legacy of family-planning insurance policies. They are additionally more and more pushed by speedy, sustained urbanisation, common schooling, and economic improvement – components which might be recognized to contribute to important declines in beginning charges.


This was definitely the case in Japan, whose rise to advanced-economy standing was adopted by a pointy drop in fertility. In 1995, nonetheless, the beginning price dropped under 1.5. A decade later, it stood at 1.26. 

Policies to encourage childbirth subsequently helped to lift the fertility price, however solely to 1.4, the place it stays right now.

South Korea is doing even worse. Although the authorities have additionally tried to encourage its residents to have extra kids, its fertility price hovered round 1.0 in 2017 to 2018, earlier than dropping to 0.84 final yr – the world’s lowest.

More daycare centres and kindergartens will be built in South Korea, and men will be allowed -- but

More daycare centres and kindergartens shall be in-built South Korea, and males shall be allowed – however not obliged – to take 10 days of paid beginning go away, up from the present three. (Photo: AFP/Jung Yeon-je)

As is true in Japan, South Korea’s low fertility charges will be defined largely by economic components. With speedy progress and large-scale urbanisation driving up housing, schooling, and health-care prices, {couples}’ willingness to have kids has weakened.

This implies critical dangers, starting with a quickly rising old-age dependency ratio.

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In China, the working-age inhabitants has shrunk by some 3.4 million per yr during the last decade. Those who’re becoming a member of the workforce right now had been largely born when the fertility price was already under the alternative degree.


Meanwhile, life expectancy is rising. As a outcome, the share of China’s aged inhabitants (aged 60 and above) rose from 10.45 per cent in 2005 to 14.7 per cent in 2013, and to 18.1 per cent in 2019.

Today, there are extra aged folks in China than there are kids (aged 15 and below). By the yr 2050, the variety of aged in China is predicted practically to double, from 254 million right now to virtually 500 million.

These tendencies will considerably undermine the potential output progress of the Chinese economic system, owing to decreased labour-force participation, and put great stress on public budgets, as outlays for pensions and social safety far exceed revenue payroll-tax revenues.

In a rapidly ageing nation -- by 2050, one in three people in China, or 487 million people, will be

In a quickly ageing nation — by 2050, one in three folks in China, or 487 million folks, shall be over the age of 60, based on the official Xinhua information company — the web has change into a kind of fountain of youth for individuals who need their skills immortalised AFP/WANG ZHAO

This is already occurring in each Japan and South Korea.

China has all the time been cautious about loosening family-planning guidelines. But, whether it is to maintain its economic dynamism within the many years to return, it should work onerous to broaden its labour pressure, together with by elevating the retirement age and inspiring households to have extra kids.

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Otherwise, its inhabitants will change into previous in the identical method Ernest Hemingway described how one goes bankrupt: Gradually, then abruptly.

Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based suppose tank. 


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