China’s Demographic Struggles

Following on from Yesterday’s post about China’s current economic woes, lets look at a longer run challenge, their ageing population.

China’s population will begin to shrink for the first time this year and is expected to fall by almost a billion, to 587 million over the next 80 years.

Further, the China’s working age population peaked in 2014 and from 2079 there are expected to be more elderly people drawing benefits that people working.

This obviously has some dire consequences for China’s long term economic growth and sustainability.

China’s efforts to boost birth rates have thus far been ineffective, with fertility rates continuing to fall. Despite removing the one child policy and providing incentives for people to have children, the fertility rate was only 1.15 children per women last year, well below to the replacement rate of 2.1.

China has also eschewed immigration, the method that most western countries have used to maintain their working age populations as fertility rates fell. In 2017, the last year we have records, China only granted 1,576 permanent residency cards, by comparison, the USA issued over 1.2 million.

If China’s youth continue their aversion to children, I suspect at some point China will be forced into opening the immigration flood gates to keep their economy growing and sustainable.