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China’s Population on Track to Peak Before 2025 as Births Drop www.bloomberg.com

China’s new births fell to their lowest in almost six decades amid the coronavirus pandemic last year, putting the country’s population on course to peak within the next five years and adding pressure on Beijing to step up reforms to maintain economic growth as the workforce shrinks.

There were 1.412 billion people in China last year, according to the results of a once-a-decade census, up 5.38% from a decade before, but slightly below previous official projections. The annual average population growth of 0.53% in the past decade was the slowest since the 1950s.

China’s population has become much more urbanized and educated over the past decade, trends which should allow the world’s second-largest economy to continue expanding even after its population peaks. In order to remain an engine of world growth, China will require a large increase in spending on pensions and health care and invest more in education and infrastructure to boost productivity.

Slower growth in the population means it could peak before 2025, according to estimates from Bloomberg Economics. Demographers generally predict that China will be overtaken by India as the world’s most populous nation sometime over the next decade, though China’s economy will remain larger as its workers are more productive.

The number of children born in the country last year fell to 12 million, the National Bureau of Statistics said Tuesday -- down from 14.65 million in 2019 and the lowest number since 1961 when the country was struggling in the aftermath of a famine that killed tens of millions of people.

Even though China rapidly contained the coronavirus outbreak and the economy returned to growth last year, its fertility mirrored other major nations such as the U.S., which saw births slump as economic and social dislocation undercut people’s desire to have children.

No Baby Boom
Number of births in China fell to lowest since 1961

The share of the working population -- those in the ages of 15 and 59 -- slumped to 63.4% in 2020 from more than 70% a decade ago, according to the census. Residents aged 60 and above accounted for 18.7% of the population in 2020, up from 13.3% in 2010.

The ruling Communist Party has been planning for a peak in the population since the 1970s when the country’s fertility rates started to decline due to rising incomes and policies restricting births. In the last census released in 2011, China was declaring victory over rapid population growth, long seen as a threat to the country’s ability to meet its own needs in products like rice and corn. But the slowdown in the population has been faster than officials expected: In 2017, Beijing projected the population would be 1.42 billion in 2020.

The birth policy was eased in 2016 to allow more families to have as many as two children, which caused the share of the population aged 14 or under to rise slightly to 18% from 16.6% over the past decade, the census showed.

Researchers at the central bank recently called for a complete relaxation of birth restrictions, but rising costs of raising children, combined with a shift in people’s preferences to smaller families also seen in other East Asian countries suggest that reform would not change overall fertility trends.

What Bloomberg Economics Says...
We think the 2020 census data suggest a population trajectory close to the low-fertility variant projected by the United Nation’s World Population Prospects (2019). That scenario would see China’s population beginning to decline before 2025. The quicker slowing of the population, particularly of the working age, calls for more urgency in policy initiatives including promoting birth, postponing retirement, improving labor mobility through Hukou reforms etc.

Eric Zhu, China economist

Beijing is planning to maintain growth by moving more of the hundreds of millions of people who work in agricultural jobs in rural areas into cities for higher-paying manufacturing and service industry work over the coming decades.

The census showed that the country added 230 million urban residents in the past decade, with 63.9% of the population living in cities last year, up from 49.7% in 2010. That puts the proportion of urban residents in China similar to levels seen in the U.S. in 1950, suggesting large potential for further catch-up.

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The population is also becoming much more educated, a trend which helps its economy grow. In 2020, 15.5% of people held degrees from vocational colleges or universities, up from 9% a decade earlier.

Beijing has announced it will raise the retirement age -- one of the lowest in the world at 60 years for men and as young as 50 for women -- “in a phased manner” by 2025 in order to slow a decline in the working age population. There’s already been an online backlash to the proposals and a government researcher wrote in March that any increase would take place gradually over a number of years instead of in a drastic one-time change.

Elsewhere in East Asia, populations have already begun shrinking. South Korea, which has the world’s lowest birth rates, had 11% fewer births last year and saw its population drop for the first time ever. It was the same in Taiwan, where the population has contracted several years earlier than the official models had predicted.

Japan’s population has been shrinking since 2011, and the 870,000 or so children born last year was the lowest number since records begin in 1898. In the U.S., which has one of the fastest population growth rates among developed nations, the pace slowed to the lowest since the 1930s, as both births and immigration slowed.

— With assistance by James Mayger, Lin Zhu, Tom Hancock, Yuko Takeo, Sam Kim, Yinan Zhao, Yujing Liu, and Jing Li

Published Date:2021-05-11

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China’s Population on Track to Peak Before 2025 as Births Drop www.bloomberg.com

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