Ibbitson: A demographic apocalypse lies behind Chinese protests and Saunders: China will soon not be the world’s most populated country. That’s good – so why is Beijing fretting?

While Ibbitson offers an apocalyptic view, Saunders present a more nuanced picture, noting that:

Population decline will soon be the norm in all but a handful of countries. While governments around the world are racing to keep population up to avoid the higher public costs of that decline (especially in structurally underpopulated countries such as Canada), we’re all going to have to learn to make substantial progress without population growth. The soon-to-be second-biggest country ought to be leading the way.

Starting with Ibbitson’s apocalyptic view:

The Chinese government will probably be able to contain the protests over COVID-19 restrictions. Beijing will probably be able to contain the protests that come after that, which may be about COVID-19 or something else. But what about the protests after that? And the ones after that?

People who are pushing back against excessive restrictions by an authoritarian regime are also reacting to a slow-moving demographic apocalypse, though many of them might not know it.

China’s population will probably begin to decline this year, and will continue to decline every year after that. The country will lose half of its population by the end of the century, possibly sooner. These losses will place an enormous strain on the country’s economy and social fabric. We can expect repeated waves of protests. Maybe worse.

According to the country’s National Bureau of Statistics, China’s total fertility rate (the average number of children born to a woman in her lifetime) fell to 1.15 in 2021. That is one full baby short of the 2.1 children-per-woman needed to sustain a population.

Worried about the dangers of overpopulation, the Communist government imposed its Draconian one-child policy in 1979. Like so many authoritarian restrictions, the policy had unintended consequences: For decades, hundreds of millions of Chinese parents had one child. They got used to it.

Alarmed by falling fertility, the government raised the ceiling to two children in 2015, and to three children last year. But the fertility rate continued to fall.

Many countries, including Canada, have fertility rates below replacement rate. (Ours is 1.4.) We make up the shortfall through immigration – something that China, whose population is more than 92 per cent Han Chinese, discourages.

For a variety of reasons – including insufficient government supports for child care, the high cost of tutors to give a child an advantage at school and a stigma against giving birth outside marriage – China and other East Asian societies have some of the lowest fertility rates in the world.

The upshot: The World Economic Forum estimates that China’s population will start to decline in 2022.

“The world’s biggest nation is about to shrink,” the report declares.

Unless fertility rates rebound – and no country in the world has brought its fertility rate back up to replacement rate, though several have tried – the world’s most populous country, with 1.4 billion people, will lose more than half its population over the course of this century, the Shanghai Academy of Science predicts. Another study, reported last year in the South China Morning Post, warns the population could halve within the next 45 years.

This will place an intolerable strain on younger workers. Because there will be fewer people entering the workforce every year, there will be fewer consumers available to buy the things that drive an economy. And this ever-shrinking pool of workers will see more and more of their income funnelled into supports for the elderly.

“China’s low fertility and declining number of working-age population will definitely result in slower economic growth” along with “social and economic inequalities,” said Ito Peng, Canada Research Chair in Global Social Policy at University of Toronto, in an e-mail exchange.

“As the labour market becomes increasingly more precarious and divided, and as the income gap continues to rise, I think it will lead to more social and economic polarization,” she continued.

Many China observers speak of a post-Tiananmen Square social contract: After the suppressed demonstrations in 1989, the state promised prosperity if people avoided politics and left the Communist Party in charge.

But each year going forward, the state will find it harder to fulfill its side of the bargain, as fewer and fewer young people support more and more old people in a slowing economy.

Many people around the world will welcome a world in which there are half a billion fewer people contributing to global warming and otherwise taxing the resources of the Earth.

But urging Chinese workers to embrace the limits of growth won’t ease their financial burden. Many of them won’t accept such hardship quietly.

The recent protests are the most extensive in more than 30 years. But they may be just the beginning.

Source: A demographic apocalypse lies behind Chinese protests

Turning to the earlier commentary by Saunders:

The news that China will soon cease to be the world’s largest country, by population, should not have been received as an unwelcome development.

But the projection that in 2023 India will surpass China as the most populated country – a detail contained in this week’s annual United Nations world population forecast – capped a long-mounting frenzy within China’s media and political class about its faster-than-expected shift to a declining population.

Beijing, visibly alarmed by this pending milestone, is now desperately pursuing population-growth strategies that include incentives to have more children and, more ominously, restrictions on birth control and abortion rights (especially for minorities), as well as efforts to prevent well-off people from fleeing to more democratic countries.

President Xi Jinping’s about-face on population policy during the past half-dozen years might appear irrational, if you don’t understand the real source of anxiety. After all, Beijing spent decades alarmed by the spectre of overpopulation, attempting to combat it with sometimes draconian family-control measures.

But what actually caused China’s population to all but stop growing was its shift from being a poor agrarian country to an increasingly middle-class consumer economy. It is now home to about 400 million citizens whose family incomes fit securely into the global middle class (with family earnings between $19,000 and $95,000 a year).

The Chinese Communist Party, as it likes to boast, has succeeded in ending the horrific absolute poverty that was created during the postwar decades by, well, the Chinese Communist Party. As a consequence, China’s population stopped growing quickly for the same reasons that it has in two-thirds of the world’s countries: urbanization, education, greater equality for women and income security.

Why wouldn’t China content itself with being a non-impoverished country of more than a billion? After all, it is Indian Prime Minister Narendra Modi’s failure to attain this status that has given his country the population crown. Its female work force participation rate is a shameful 19 per cent (compared with 62 per cent in China) and its share of agriculture in employment has actually risen, to almost 40 per cent (while China’s has fallen below 25 per cent).

So why is Beijing so anxious? To understand that, you need to look beyond the headline national-population figures in that UN report. As economic writer Justin Fox noted in his analysis at Bloomberg, the striking change is how quickly working-age populations are falling: Within a few decades, Europe, Canada and the United States will have more working-age people than all of East Asia.

You might think this doesn’t matter any more. Aren’t we beyond the age when a country needed vast reserve armies of labour? China stopped being predominantly a low-wage export-manufacturing economy around the time of the 2008 economic crisis. There just aren’t that many very low-wage, labour-intensive industries at the heart of major economies any longer; the big growth sectors these days, especially in China, are all more skilled, more educated, service-dominated fields.

But Mr. Xi and his officials aren’t obsessed with the size of their working-age population because they want more workers; they’re obsessed because they believe an aging population, with fewer tax-contributing workers and more revenue-consuming pensioners, will make it impossible to escape the “middle-income trap.”

That theory emerged in 2006 to describe the paradox faced by most countries in Latin America and the Middle East, as well as some in Asia: The very economic growth that got them out of poverty made their wages too uncompetitive to rise beyond the slightly-above-poverty level, where they then remain stuck.

In his fascinating recent analysis of Mr. Xi’s decade-long obsession with the concept, Frank Tang of the South China Morning Post notes that the President and his cabinet have raised the spectre of middle-income traps dozens of times in major speeches and reports. Senior party officials have frequently concluded that the biggest barriers to breaking out of the trap are “the economic impact of the country’s rapidly aging population” and its falling fertility rate – possibly because they know that Asian countries that have escaped it, such as South Korea and Singapore, did so while their populations were still growing.

Major economic analyses of China’s economic prospects, however, conclude that any escape from the trap requires increases in efficiency, productivity and technological innovation – and an end to repressive policies that are quickly driving developed economies away from investing in, and trading with, China. A growing working-age population may make it cheaper and easier to do so, but isn’t really required.

Population decline will soon be the norm in all but a handful of countries. While governments around the world are racing to keep population up to avoid the higher public costs of that decline (especially in structurally underpopulated countries such as Canada), we’re all going to have to learn to make substantial progress without population growth. The soon-to-be second-biggest country ought to be leading the way.

Source: China will soon not be the world’s most populated country. That’s good – so why is Beijing fretting?

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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