China is home to 1.4 billion people.
That means about 1 out of every 5 people around the world lives in China.
But the country is facing a population crisis.
The Chinese population shrinking
for the first time
since the Great Famine in 1961.
China's population could shrink by 48%
between now and the end of the century.
China's population decline
has really come faster than was expected.
It could mean economic stagnation.
It could also mean that
China may never eclipse the US as the world's largest economy.
To maintain its current population,
every woman in China must give birth
to two children in her lifetime.
But China's fertility rate
has dropped well below that threshold.
Urban households have
even lower fertility rates.
Shanghai's fertility rate in 2022 was 0.7.
That's lower than South Korea,
the country with the world's lowest fertility rate.
In past decades,
China has really been dependent on this
vast labor force for the economic boom.
As this labor force is shrinking,
will China still have the same driving force
for its economic growth but also for global economic growth?
China's working-age population already started to contract
around 2015 or 2016.
In the next three decades,
In the next three decades until 2050,
the working-age population
can further drop by 300 million.
In the longer term,
we have fewer people working
but supporting more people in retirement.
Less demand, less output,
we're just entering such a vicious cycle.
We had the government think tank estimating that
the main pension fund for urban workers
will hit zero by 2035.
It could leave huge burdens for a lot of elderly people
and their offspring
who are not taken care of by the social security system.
Beijing really needs to not only shift its growth model,
but also it needs to rapidly increase
spending on pensions and health care.
If it fails, it could mean economic stagnation.
And it could also mean that China
may never eclipse the US as the world's largest economy.
China's GDP growth can slow from 5% at present
to like 2% in 30 years.
So for those who are relying on China's demand,
they have to prepare for a slowing China economy.
This also means opportunity
for some emerging economies like India,
who also want to grow at a fast speed,
trying to gain more share in the global economy.
They still have quite strong population growth,
which can be an important driver for their GDP growth.
But for a long time,
China wanted to keep its population growth under control.
As a shortage of resources put pressure on the developing country,
the government introduced a policy in 1980
that limits families to have just one child.
The government implemented the policy through fines.
There's potential loss of jobs
if you are a government employee.
But also in many cases, forced abortions and sterilizations.
There is a saying in traditional Chinese culture
that explains how people view fertility.
That is: the most disrespectful thing
someone can do to their family is to not have children.
But that doesn't include daughters.
Because only sons can inherit family names
and family wealth.
This led to China's boy-preference.
As parents were allowed to have fewer babies,
some people resorted to illegal means to determine a baby's gender.
This led to more abortions when
parents determined their child would be a girl.
The normal range for sex ratio at birth
Since the 1980s,
this ratio in China has stayed well above that.
The most recent census suggests that
there are over 32 million more men
than women in China.
With a lack of female population
and decades of stringent birth control,
the government had reduced the number of births
in the last few decades by
But now,
they are facing a tough challenge of reversing that.
These demographic challenges have attracted
attention from the highest levels,
with President Xi saying that
China is going to focus on boosting birthrates
and also take a proactive response to the aging population.
So, the government has really reversed this one-child policy at a very rapid clip.
In 2016, it officially ended that policy in place of the two-child policy.
And even two years ago,
when we had then again the three-child policy,
this has really done very little
to put a halt to this
very rapidly dropping fertility rate.
Having babies looks like a personal choice.
But parents all have to take the country's
social security system and benefits into consideration.
I recently saw a blog post from a Chinese woman.
She says her monthly income is ¥6,000 CNY ($872 USD)
If she's raising a child
it takes most of her salary to cover her child's everyday needs.
Some parents are complaining that
the cost to send their kids to kindergarten is as expensive as college tuition.
Even if both parents are working,
they have to dedicate all of one person's salary to childcare.
That's a huge burden on any ordinary family.
And that's just daily expenses.
China's homes are notoriously expensive.
It's almost impossible for couples to depend on their income to pay for it.
They either have to get help from their parents
or resort to other sources to get that money.
Some local governments reward parents
with a few thousand CNY for having a baby.
But this makes little difference for couples.
Because having a child is a lifelong commitment.
Because having a child is a life-long commitment.
China's government, especially in the very top echelons,
are very much male dominated.
One criticism of some of these policies is that
they just fall so woefully short and they are very male-centric.
They're more superficial responses
to very deeply entrenched social issues
that women are demanding change.
We see more and more women hoping
to get more involved in making and changing laws and regulations.
But unfortunately,
Chinese media outlets are heavily censored.
There's not enough coverage and discussion on this topic.
To ensure that economic growth
doesn't slow with this population drag,
Beijing has some tools in its toolkit.
It can raise retirement age.
It can also encourage people
to move from the rural areas into the cities.
And it is already investing heavily
in vocational education as well as
in automation and science and technology.
Population decline is a global issue.
We're all preparing for a world
with fewer population and fewer workers.
China probably has slowed much faster
than other countries at a similar stage.
But I think other economies,
they are also seeing a slowdown in their growth.
In the longer run,
it's not necessarily that
when China slows
other economies will gain from China's decline.