A Blog by Jonathan Low

 

Jan 20, 2023

The Social, Economic and Political Threat Posed By China's Declining Population

China's population is poised to lose 5 to 10 million working age adults while gaining 5 to 10 million old people for the foreseeable future. 

This threatens China's position as an export platform as wages will rise even as fewer factories can be built. It also affects China's military's need for recruits - and both of those impact its global standing. The result, many fear is that China will become more aggressive in hopes of staving off the anticipated decline. JL 

Chris Buckley and colleagues report in the New York Times:

China must prepare for a slowly shrinking population and an era of fewer workers and more retirees. The nation’s population shrank last year for the first time in six decades, sooner and sharper than many experts had forecast. The mounting population pressures may reveal a government that has tough choices in coming decades over rival priorities. Between the demands of caring for young and old. Between paying for social welfare and building up China’s technological and military might. The reason many couples choose to have one child or none at all, (include) costs of rearing and educating children, lack of government support for women, at home and in the workplace. The economic pressures will erode China’s strength and could encourage it to become more aggressive

China’s leaders have long known that the country is nearing a demographic crossroads. Policymakers have warned that China must prepare for a slowly shrinking population and an era of fewer workers and more retirees. State media have urged young couples to seize the opportunity to have two or three children under relaxed family-size rules, to soften the looming economic crunch.

And yet the sense of incipient crisis grew on Tuesday, when the government confirmed that the nation’s population shrank last year for the first time in six decades, sooner and sharper than many experts had forecast.

Even if Chinese officials have warned that a demographic Rubicon was approaching, their preparations have not kept pace with the long-term needs of an aging society, in the eyes of many experts and Chinese people.

China’s abrupt abandonment of “zero Covid” controls exposed a government ill prepared for an explosion in infections. And, similarly, the mounting population pressures may reveal a government that has not done enough to avoid tough choices in coming decades over rival priorities. Between the demands of caring for young and old. Between paying for social welfare and building up China’s technological and military might.

China’s leader, Xi Jinping, has partly sought to tackle the long-term economic and social pressures from a shrinking, aging society more by lifting the limits on family size. He has taken steps to build a strong social safety net and announced a new phase of “high-quality” growth less dependent on legions of cheap, abundant migrant workers from the countryside.

“The population issue is the most important issue for the future and yet the one that is most easily neglected,” Ren Zeping, a former chief economist for the Evergrande Group, a massive housing developer, who has studied the looming demographic crunch, wrote in a widely circulated comment after the figures were released Tuesday. Mr. Ren called for more energetic policy-making, including birth subsidies, stronger paternity and maternity leave, and improved protection of women’s rights in the workplace.

After the latest population statistics were released, many suggested in social media posts and in interviews that the government’s moves may be too little and too late. To many, the government has barely begun to tackle the deeper reasons many young couples choose to have one child or none at all, like the costs of rearing and educating children and lack of substantial government support, especially for women, at home and in the workplace.

“I’d like to have a kid, but the living pressures are just too much,” Wu Yilan, a 34-year-old shopkeeper in Beijing, said in a telephone interview. She said she had discussed it with a former boyfriend. “If I settle down with a partner, I’d probably think that one child is enough.” Anxiety and argument about China’s new demographic era have been building as birthrates have slowed, especially in recent years. It has now hit a turning point: China’s population in 2022 fell by 850,000, with more deaths than births for the first time since a famine in the early 1960s caused by Mao Zedong’s calamitous social experiment, the Great Leap Forward.

Chinese demographers, economists and business leaders have offered a number of ideas to support a growing number of older people and encourage couples to have more children. In 2016, the government eased the “one-child” policy that had been enforced for over three decades, allowing families to have two children. In 2021, it increased the limit to three.

Even so, most couples still stick to having one child, while two is common in the countryside. Many young people, especially women, remain skeptical that the government is going to make it easier for them to both have children and remain in the formal work force.

Jennie Liu, a 32-year-old podcast platform manager in Shanghai, said that she and her boyfriend agreed that they would like to raise one or two children — but only if they could “run,” a Chinese buzzword for moving abroad.

“If we can run to somewhere with better welfare and an improved overall social environment where a child can obtain residency status, then we may think about having a kid,” she said. In China, “the aging population and decline of the working-age population will definitely put pressure on government finances.”

The societal issues run deep. After Tuesday’s data release, some on the Chinese internet said that despite government promises of a fairer deal for women, many employers did not want to employ women in better, steady jobs, because they did not want to deal with maternity leave and child care.

“In the job market, they worry that if you’re 23-30, you’ll get married and have a kid, that if you’re 30-35 you’ll have a second or third one, and if you’re over 35, then sorry,” read one comment. “This kind of social setting is already the best form of contraception. All those policies to encourage births and open up will amount to nothing.”

The measures championed by Chinese policymakers often neglect the broader pressures on women, especially those from rural and working-class backgrounds, which put them in a painful bind between family and work, said Yige Dong, an assistant professor of sociology at the University at Buffalo, which is part of the State University of New York system.

Families face intense pressure to get children into better schools, with much of the burden falling on mothers who are often also expected to care for aged parents and parents-in-law.

“They are caught between the demand to go to work and the demands for intensive parenting,” Ms. Dong said, citing interviews with female migrant workers in central China.

“On the one hand, China is talking about this as a crisis of a declining fertility rate, and on the other hand, they are cracking down on feminism,” she said in a telephone interview. “With those two things in contradiction, how can you convince the next generation of young women — who have their own aspirations — to go into marriage?”

A shrinking, aging society is far from unique to China, even in Asia, and the effects will unfold over decades. Even so, China’s heavy restrictions on family size in past decades mean that the country is confronting these pressures much sooner in its economic takeoff than, say, Japan or South Korea. The resulting economic and population pressures will erode China’s strength in coming decades and could encourage its leaders to become more aggressive before they feel their national power has ebbed, says Michael Beckley, an associate professor at Tufts University and co-author of Danger Zone: The Coming Conflict with China, a new book that lays out this argument.

“China’s proposed demographic reforms are drops in the bucket. They are swamped by the fact that China will lose 5 to 10 million working-age adults and gain 5 to 10 million senior citizens every year for the foreseeable future,” Professor Beckley said in emailed answers to questions. “You can’t compensate for that kind of demographic crunch simply by raising the retirement age.”

Other scholars have disputed Professor Beckley’s forecast of a demographically led decline in Chinese power. China, they note, could counter population pressures by providing better training for workers, improving their productivity and by increasing innovation and automation across industries.

But few disagree that such changes would demand much more spending commitments from Chinese leaders, who also want to invest heavily in military modernization, technological advancement and internal security.

Mr. Xi has not been blindsided by these challenges. Beijing has unfurled policies to encourage expanded senior care, and promised more social support for women who want to have children. Since citizens have repeatedly expressed public anger over sexual harassment at universities, companies and media outlets, the government has also promised to crack down.

While Mr. Xi has endorsed equality between the sexes and repeated Mao’s dictum that “women hold up half the sky,” he has also encouraged respect for traditional family roles.

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