Seeking Alpha
Recommended for you:
Profile| Send Message|
( followers)  

The question of whether China has enough people may seem absurd. The country has long been known for both having the world's largest population and for having taken draconian measures to restrain its growth. Though many people, Chinese and outsiders alike, have looked aghast at the brutal and coercive excesses of the one-child policy, there has also often been a grudging acknowledgment that China needed to do something to keep its vast numbers in check.

How will China's economic hegemony look like in 2040?

  • GDP would have touched $123 trillion - 3x the economic output of the entire globe in 2000
  • Per capita income of $85,000 - More than 2x forecast for EU and much higher than Japan or India
  • Average Chinese mega-city dweller life standards - 2x the average Frenchman

Though it would not have overtaken US on per capita wealth basis, its 2040 World GDP share at 40% of total would dwarf that of the US at 14% and EU at 5%. China's economic ascent to the top still now has been primarily fueled by its "demographic dividend," given an extraordinarily high proportion of working age population. But all that is expected to change, and the population bulge is becoming a problem as it ages.

How does China's demography currently look?

Let us now look at the latest census figures for China, which show that it is suffering from a demographic problem of a different sort: too low a birth rate.

  • Total population for mainland China at 1.34 billion
  • Steep decline in the average annual population growth rate, down to 0.57% in 2000-10, half the rate of 1.07% in the previous decade
  • Total fertility rate, which is the number of children a woman of child-bearing age can expect to have, on average, during her lifetime, may now be just 1.4, far below the "replacement rate" of 2.1, which eventually leads to the population stabilizing.
  • People above the age of 60 now represent 13.3% of the total, up from 10.3% in 2000. In the same period, those under the age of 14 declined from 23% to 17%

The roots of population aging in China are the same as elsewhere:

  • A low fertility rate,
  • Rising life expectancy, and
  • Cumulative effect of past changes in birth and death rates.

Source: UN, 2009.

Life expectancy in China is increasing, but the number of young adults is plummeting due to strict birth control policies.

Source: UN, 2009.

In 2009 there were 167 million over-60s, about an eighth of the population. By 2050 there will be 480 million, while the number of young people will have fallen. As a result of trends in both fertility and longevity, the elderly share of China's population has been increasing, and those ages 60 and over are set to form a rapidly growing share of the population. By 2050, it is projected that the population ages 60+ and 80+ will reach 440 million and 101 million, respectively.


Source: UN, 2009.

Impelled by the declining fertility rate, the ratio of the working-age (15-64) to non-working-age population grew rapidly starting in the late 1970s. It is reaching its peak right now and is projected to decline (in significant part because of the increasing elderly population) nearly to its 1980 level by 2050. This ratio is important because it is a direct indicator of the number of dependents each person of working-age will, on average, need to support.


Source: UN, 2009.

Decoding the census numbers

The UN's population division projects China's nationwide fertility rate continue to decline and touch 1.51 in 2015-20. On the contrary, America's fertility rate is 2.08 and on the upward trend. Though the difference between 1.56 and 2.08 does not seem huge, it could have a significant impact on the society in the long term. Assuming that China's fertility rate starts to recover, its population will fall moderately from 1.34 bn now to less than 1.3 bn by 2050. In case of fertility staying low, there are chances of population dipping below 1 bn. On the other hand, America population looks set to grow by 30% in the next 40 years.

Now let us look at the average ages. In the 1980s, China's average age was 22 years, resembling a young developing country. Currently it stands at 34.5, much like a developed country (America is at 37 years). But China's aging is taking place at a fast pace. As fewer children are being born and larger generations of adults are getting older, its median age will rise to 49 by 2050. This is almost nine years more than where America is expected to be at that point. Some cities will be older still. The Shanghai Population and Family Planning Committee says that more than a third of the city's population will be over 60 by 2020.

Continue to Part 2 >>

Source: Will China Grow Old Before It Becomes Rich? A Demographic Time Bomb, Part 1