A leading demographer who has long warned on China's population challenge wrote about the extremely low fertility rate, its consequences for the Chinese economy and nation, and policy recommendations to cushion the coming shock negative impact
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Stanford-trained former research professor at Peking University Dr. James Jianzhang Liang is an economist, public intellectual, and most interestingly a successful businessman behind China's largest international travel platform @tripcomgroup
He has been outspoken for years.
He has been outspoken for years.
Dr. Liang:
China’s population registered 1.41175 billion at the end of 2022, down 850,000 from the end of the previous year. It is the first time in nearly 61 years that China's population has declined - no surprise for those who have always paid attention.
China’s population registered 1.41175 billion at the end of 2022, down 850,000 from the end of the previous year. It is the first time in nearly 61 years that China's population has declined - no surprise for those who have always paid attention.
In 2016, the number of births rebounded temporarily (new births at 18.83 million), boosted by the Two-Child Policy. Only six years later, however, the number of births in 2022 fell by nearly HALF to 9.56 million. Such a slump is even beyond the most pessimistic estimation.
In general, the total fertility rate (TFR) between 1.3 and 1.5 is referred to as an ultra-low fertility rate. A case in point is Japan, whose TFR stands at 1.4. In China, if there are 9.56 million births per year (the 2022 level), the TFR is still less than 1.1, only half of the
replacement level and even 0.3 lower than Japan's and 0.5 lower than western developed countries. Such TFR can be called an extremely low fertility rate and is almost among the world's lowest, only slightly higher than South Korea.
what will happen if the decline becomes the norm for China's population in the long run? The elderly care is the first to bear the brunt. The newborn babies of each year will become the backbone of society in twenty to forty years.
What’s worse, the plunge in the young population may undermine the innovation of China’s economy. The vitality and resilience of China’s economy are driven by the country’s advantages of having a super-large market and population.
Moreover, the economic slowdown and the aging population will inevitably result in less inclination of youngsters to innovate and start up businesses, thus dealing a heavy blow to the creativity of the whole economy.
This is similar to what has been happening in Japan over the past few decades — just more rapid and severe in China.
Some Chinese local govt have rolled out pro-birth policies, but Dr. Liang says they are far from enogh.
For one thing, regarding the soaring child-rearing cost, the current cash subsidies may not bring the expected results of childbirth encouragement until being further expanded.
For one thing, regarding the soaring child-rearing cost, the current cash subsidies may not bring the expected results of childbirth encouragement until being further expanded.
Some European countries have successfully raised the birth rate by spending 2-3% of GDP on average to encourage more babies. Since the birth rate is lower in China, it may take China 3-5% of its GDP to see some improvement.
cash subsidies are not enough to eliminate families’ concerns about childbirth. For example, as newborn babies may overburden families, China needs more preschools built in the future to raise the preschool enrollment rate among children aged 0-3 from less than 5% to around 50%.
Moreover, children may be overwhelmed by pressure from fierce competition in education when they grow up, which also stops young couples from having more kids or even the first. To solve this problem, an overhaul of the education system
including canceling Zhongkao (the Senior High School Entrance Examination) and shortening the schooling length, is needed.
In conclusion, despite the fact that we have long ago predicted China’s population, it is still shocking to see it come so rapidly. The population decline unseen in China for many years has once again sounded an alarm.
The impact of the birth rate plunge in the past five years on China’s economy will take about 20 years to manifest fully.
Dr. Liang says he is optimistic about China’s economy in the short and medium term, but the long-term negative impact is bound to be tremendous.
Dr. Liang says he is optimistic about China’s economy in the short and medium term, but the long-term negative impact is bound to be tremendous.
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