My last two posts focused on labor shortages and population growth; two critical societal building blocks that converge in ways that shape our future. Continuing with that theme, this recent article looks at these building blocks through the lens of China.
China has edged over a demographic precipice: Its population has begun to shrink. United Nations data published on Monday showed that the long-anticipated tipping point came in the first half of the year; it’s a significant moment for a country whose large population helped transform it into a manufacturing powerhouseLili Pike – The end of China’s population boom has arrived. How will the country’s changing demographics shape its future?
According to the referenced United Nations Data, the world’s population is projected to reach 8 billion on 15 November 2022. The report titled World Population Prospects 2022 provides the latest United Nations projections that suggest the global population could grow to around 8.5 billion in 2030, 9.7 billion in 2050 and 10.4 billion in 2100. Another data point from the U.N. report highlights that population growth is driven in part by declining levels of mortality, as reflected in increased levels of life expectancy at birth. Life expectancy reached 72.8 years globally in 2019, increasing 9 years since 1990. Mortality reductions are projected to result in an average longevity of around 77.2 years globally in 2050
An unprecedented historical population decline is taking place at the same time as China’s rapid economic growth has cooled down significantly. This could call for a national mental adjustment for China’s leaders as well as for its peopleWang Feng, a sociologist at the University of California, Irvine
Viewing population growth through the lens of China and India is instructive. That quote from the referenced article touches on issues that emerge when fertility rates drop over an extended period. The now infamous one-child policy implemented in 1980 has created a demographic crisis. Two attempts to reverse the trend failed, first with a two-child policy and then three. The fertility rate – the number of children born to each woman – currently stands at 1.2; that’s well below the replacement rate of 2.1 children. Chinese millennials cited a lack of child-care options and financial pressures as their top reasons for not having a second child.
Several visuals from the article illuminate the economic issues that a society faces when population declines. The visual above shows two societal building blocks converging: death rate and birth rate. The visual to the left shows the impact: an aging society with a declining workforce. According to the article, the working-age population in China has been shrinking since 2012, and U.N. projections from 2022 to 2050 have the workforce contracting another 22 percent; that means 217 million fewer people to power China’s factories, farms and services. The government therefore will face a much greater fiscal burden – a scenario likely to play out globally. Managing the challenge of China’s declining population will be a central task of leaders for decades to come.
Meanwhile, India is projected to surpass China as the world’s most populous country during 2023. Where China must worry about economic decline, India will face challenges related to climate change, food, education, and jobs. On both ends of the population spectrum, a nation faces challenges. These projections are just that. If the pandemic has taught us anything, it is that extreme levels of uncertainty make any projection or prediction suspect.