- By Samantha Chan
- ` News, Singapore
14 minutes ago
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China’s birth rate has been declining for years
Crystal, who declined to give her real name, is 26 and lives in Beijing. Unlike most women of previous generations in China, she is unmarried and currently feels no pressure to tie the knot.
When asked why that is, she laughs, “I think it’s because my family members are either never married or divorced.”
It seems to be a common sentiment among young urban women in China. A 2021 survey of nearly 3,000 people between the ages of 18 and 26 by the Chinese Communist Youth League found that more than 40% of young women living in cities had no intention of getting married — compared with less than 25% of men . This is partly due to rising childcare costs and the ghosts of China’s one-child policy.
“Having only one child or no children at all has become the social norm in China,” says Yi Fuxian, a senior researcher in obstetrics and gynecology at the University of Wisconsin-Madison and a prominent critic of the one-child policy.
“The economy, the social environment, education and almost everything else relates to the one-child policy,” he adds.
For Beijing, this is a worrying trend as China’s population declines. The birth rate has been slowing for years, but in 2022 the population fell for the first time in 60 years.
This is bad news for the world’s second-biggest economy, where the labor force is already shrinking and an aging population is beginning to put pressure on government welfare payments.
China’s working-age population – those aged between 16 and 59 – currently stands at about 875 million. They make up just over 60% of the country’s population.
“China’s demographic structure in 2018 was similar to Japan’s in 1992,” Mr. Yi said. “And China’s [demographic structure] in 2040 will be similar to Japan in 2020.”
Until last year, many economists had expected China’s growth to surpass that of the US by the end of the decade – a move that would cap the country’s extraordinary economic rise.
But dr Yi says that now seems unlikely, adding, “By 2031-2035, China will underperform the US on all demographics and in terms of economic growth.”
The average age in China is now 38 years. However, as the population ages and birth rates continue to decline, there are concerns that China’s workforce will eventually be unable to support those who are already retired.
The retirement age in China is 60 for men and 55 for women. Currently, the over-60s make up almost a fifth of the population. In Japan, which has one of the fastest aging populations in the world, nearly a third of people are 65 or older.
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China’s aging population is bad news for its economy
“Population aging is not unique to China, but the strain on China’s pension system is much more acute,” says Louise Loo, senior economist at Oxford Economist.
She says the number of retirees has already exceeded the number of contributors, leading to a drop in contributions to the pension fund since 2014.
The country’s pension fund is administered at the provincial level and on a pay-as-you-go basis – that is, employee contributions pay pensioners’ pensions.
Beijing, aware of these cracks in its system, set up a fund in 2018 to shift pension payments from wealthier provinces like Guangdong to those with a deficit. But in 2019, a report by the Chinese Academy of Social Sciences predicted that the country’s main pension fund would be exhausted by 2035 due to its shrinking workforce.
Then, in 2022, China launched its first private pension scheme in 36 cities, allowing individuals to open retirement accounts with banks to purchase retirement products such as mutual funds.
But Ms Loo says it’s unclear whether many Chinese, who typically invest their savings in more traditional avenues like real estate, would turn to private pension funds instead.
These problems aren’t unique to China — Japan and South Korea both have aging populations and shrinking workforces.
Mr. Yi noted that Beijing is ready to replicate Tokyo’s parenting cost-cutting policy, but he adds, “China, which ‘gets old before it gets rich,’ doesn’t even have the financial resources to fully follow Japan’s path .”
And that’s not the only thing worrying Beijing. There is also a growing online youth movement to “get laid”. It calls on workers to reject the struggle for professional success and promises liberation from the pressures of life and work in a fast-moving capitalist society. There is also a high youth unemployment rate, which peaked last July when 20% of 15-24 year olds were unemployed.
As Mr. Yi puts it, “The labor force is the flour, and the pension system is the ability to bake bread.
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