China’s Demographic Time Bomb

When the United Nations published its latest population projections, the expected aging of the world’s population foreshadowed impending challenges for national and regional economies. Low birth rates and increased longevity are drastically altering the balance between numbers of young and old; the number of working adults supporting each retiree is falling precipitously.

As incomes rise and families rely less on children for support, they have fewer children. Unless a nation’s fertility rate – the number of children born per woman – is at least 2.1 children, the total population will decrease and median age of the population will rise.

The ratio of 20–64-year-olds to 65+ year-olds, called the support ratio, is falling throughout the world. The change over the last 70 years has been dramatic. The decrease on the African continent is well behind the rest of the world but will start to catch up over the next 30 years. In 1950 Africa had 14.0 people 20-64-years old for everyone 65 or over; by 2020 the ratio had fallen only to 13.0, a minor change. By 2050 the ratio is projected to fall to 9.2.

Support Ratio for Continents and Selected Countries 1950 2020 and 2050

1950   2020    2050

  • Africa                                                14.0    13.0       9.2
  • Asia                                                   12.3      6.8       3.2
  • Europe                                                7.2      3.1       1.9
  • Latin America & Caribbean           13.1      6.6       3.1
  • United States                                     7.0      3.5       2.5
  • United Kingdom                                5.6      3.1       2.1
  • China                                                 11.8      5.4       2.1

Compared to other continents, Africa will be relatively well-off in 2050. Africa’s 9.2 working-age people for everyone 65 or older, will be three or four times as many as other parts of the world. China faces the most serious decline in its support ratio, from 5.4 in 2020 to 2.1 in 2050,  decrease of 61%. More than other areas, China will struggle with this transformation.

China’s relative decline in its working-age population has been described as a ‘demographic timebomb.” The government’s one-child policy was introduced in 1979 to slow population growth. Due to the cultural preference for male children, the policy resulted in a severe gender imbalance, with males eventually outnumbering females by 30 million. Although the policy was ended in 2015, the birth rate continued to fall. China’s fertility rate is estimated to be below 1.5, which explains why its support ratio is projected to drop from 5.4 to 2.1.

In a New York Times article, Ross Douthat attributed China’s situation to “growing old without first having grown rich.” Its per capita GDP is one-third or one-fourth the size of South Korea and Japan. “China will have to pay for the care of a vast elderly population without the resources available to richer societies facing the same challenge.”

A recent article in Foreign Affairs cites the geopolitical dimension of China’s current situation. As China’s growth rate has dropped by more than half and debt increased eightfold, it faces a loss of 200 million working-age population while gaining 300 million retirees. If China is to achieve international supremacy, it must establish its position over the next five to ten years, during which “the pace of Sino-American rivalry will be torrid, and the prospect of war frighteningly real, as Beijing becomes tempted to lunge for geopolitical gain.”

China recognized its challenge in a “Green Paper” issued in January 2019, in which it alluded to a pivot from manufacturing to services: “only by further expanding the scale of higher education can we improve the skill structure of the labor market and provide sufficient demand for talent for the transformation of the ‘Made in China 2025’ and high-end service industries.” However, in risking the loss of young Hong Kong citizens fleeing to the United Kingdom, and in sterilizing its young married Uighur women, the government is exacerbating the impending “time bomb.”

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