here has been a long-held consensus among experts that there will be a demographic shift in China as its population ages, but there are still disagreements about how serious the problem is.
Challenged with a rapidly growing population and serious unemployment, China adopted the one-child family planning policy. Over the last decades, China’s fertility rate dropped rapidly from its peak of more than 5 in the 1960s to about 2.1 in the late 1980s, and further to between 1.2 and 1.3 in the late 1990s.
The government’s reaction to the demographic change has been rather slow. Not until 2016 did the Chinese government liberalize its policy to allow couples to have a second child. The policy led to a rebound in the fertility rate which reached 1.58, 1.50 and 1.47 in the years between 2017 and 2019. But experts warned the impact of the policy would be short-lived. According to Liang Jianzhang, an economist from Peking University and co-founder of travel provider Ctrip.com, the boost in this period mostly came from couples who wanted to have a second child anyway.
As this effect gradually disappears, China’s fertility rate will drop again. Liang estimates that China’s fertility rate will drop below 1.2 in the next couple of years, which is not only lower than the US and Europe, but also Japan. China will join South Korea and Singapore to have one of the lowest fertility rates in the world.
The persistent low fertility rate has already led to a historic demographic shift. According to estimates from the National Bureau of Statistics, in the past decade, China’s working age population has contracted by an average of 3.4 million each year. In the meantime, the ratio of the population aged over 60 years old increased from 10.45 percent in 2005 to 18.1 percent in 2019. The population of those aged over 65, numbering 254 million, has surpassed the population aged below 15. As the population continues to age, the shrinking of China’s labor force appears unstoppable.
While some causes of China’s declining fertility are global, others are unique. It is a global pattern that economic growth and increases in living standards drive down fertility. China’s rural-to-urban mass migration contributes to a decline in people’s desire to have children. Besides these global factors, runaway housing prices, rising childcare costs and fierce competition within China’s educational system deters many would-be parents.
To tackle these problems, the Chinese government has increased financial inputs in the childcare system, tried to stabilize property prices, and more recently started to crack down on the ever-expanding tutoring business. In the meantime, the government is mulling whether to raise the retirement age. But by and large, the government has been very conservative about reversing its family planning policy. For example, it has not completely liberalized its policy to allow all parents to decide the nuber of children they want to have, as many experts have called for.
As the situation appears to be getting worse and worse each year, the government must learn lessons from other Asian countries like Japan, South Korea and Singapore, that is, once a country’s fertility rate starts to fall, it is extremely difficult, if not impossible to reverse the trend. China needs a more proactive approach to address problems which could cast a shadow on China’s long-term development.
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