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China’s Demographic Crisis: Declining Labour Population

The Chinese ten-year census published on May 20201, confirmed that the country’s workforce will shrink over the next decade. Although the population has grown to 1.412 billion in 2020, China is suffering from a demographic shift, a decreasing labour force and a fast ageing society, that could “weigh on the country’s economic progress in the years ahead”. The ageing population trend is becoming a prominent issue for governments around the world. According to the United Nations, the number of people aged 65 and over, 727 million, is expected to double by 2050, reaching over 1.5 billion. Although the process of population ageing is more prominent in North America and Europe, the UN predicts that nearly 8 in 10 of the world’s older persons will be living in the developing regions.

Today, the most afflicted country by this demographic crisis is Japan with 28.7% of the population being 65 years and over, mostly being women. Additionally, Japan is also suffering from a rapid shrinking population rate. These tendencies are said to be triggered by two elements: a high life expectancy and a low fertility rate. Older adult mortality has declined as the overall health of the population has enhanced in the past decades. More people have access to universal health insurance coverage (UHC) and there is an increasing consciousness of healthy lifestyles and healthy eating habits. The declining population rate is partly caused by the working culture of the country. Working for long periods prevents people from achieving a work life balance, limiting marriage and family life. In addition, there are still traditional gender divisions of tasks within Japanese families, where women are expected to care for the children and the household. The decreasing number of youngsters threaten Japan’s economic vitality as well as the security of its social safety net.

China is following the same steps. In 1980, the one-child policy was established to halt the country’s population growth and facilitate economic development. Over the last few decades, China has experienced outstanding economic growth, lifting more than 770 million people out of poverty since the late 1970’s.

Nonetheless, this growth has been accompanied by a dramatic regression of fertility rate, abnormal sex ratios at birth, pension fund deficiency, shortages of labour force, pressuring the Chinese Communist Party (CCP) to relax and discontinue the family planning regime. It was not until 2015 that the government scrapped the policy to allow couples to have two children. Since then, the government has been attempting to engineer a baby boom to reverse the ageing population. The new measure however, has had a short-term effect on balancing the structure of the Chinese population. According to the journal of Studies in Family Planning, the ageing population “is a burden not only for Chinese society as the support ratio between the working-age population and the elderly declines, but also for many of working age who are only children.” In addition, the government has to cope with a highly-skewed sex ratio at birth due to sex-selective abortion during the one-child policy period, which resulted in a strong preference for new-born boys over girls - this lasted for 35 years and had irreversible consequences.

The decennial census is a key tool for policy makers in the country as it gathers the size and diversity of the population but also personal and household information such as age, occupation, education marital and migration status. Despite the coronavirus pandemic, the CCP employed the use of technology from its giant Tencent to gather people’s information, while respecting COVID-19 measures, promising to keep them confidential amid allegations of violating data protection rules.

This year, the National Bureau of Statistics (NBS) released the census for 2011-20, revealing that the Chinese population was growing at its slowest rate in decades. The 7th national census showed that out of 1.41178 billion people, both the age group of 60 and over and the one of 0 to 14 increased - 18.70 % and 17.95% respectively. However, it reported a fall in the population of working age between 15 to 59, now accounting for 63.35%. While this figure has decreased by more than 40 million compared to 2010, experts remind that today’s population is still very large and the sheer size of labour resources is abundant. Moreover, the survey shows that people’s educational level has increased significantly.

Although the two-child policy has encouraged couples to have children in the last decade, the census has also raised concerns over women’s fertility rate, with a value of 1.3 in 2020. Experts argue that it is caused by multiple factors: gradual wearing-off of the reform’s effect, decrease in women of childbearing age and higher costs of childbirth. China’s rapid modernization and industrialization has also changed people’s views on birth as women are focusing more on their professional careers. In addition, the pandemic has “added uncertainties to life and worries about in-hospital childbearing, further dampened people’s willingness to have children”. Beijing might soon reach a turning point like Japan, urging the government to take firm action. However, as Cai Fang, vice-president of the Chinese Academy of Social Sciences argues “we cannot expect any miracle that can substantially increase the fertility rate and delay the ageing of the population.”

Nevertheless, Ning Jizhe, the commissioner of the NBS, called for a comprehensive and objective assessment of these figures. The Bureau sees both the share of children and the elderly population upsurges as favourable to China’s prosperity. Though the growth in the ageing population will reduce the supply of labour, raise the pressure to provide basic public services and burden families with elderly care. The census’s data has demonstrated that the CCP’s policies have been positive for the country’s demographic but it also highlights the importance of continuous improvement in pertinent strategies. Overall, experts believe that the dividends in the demographic of China can offer “an important support for sustained and healthy social and economic development”.

The case of China is not unique. The issue of low fertility rate appears to be a common problem in most developed countries. Studies have shown that there is a correlation between a strong ageing population, lower fertility rates and increasing life expectancy - coupled with a shrinking working-age population. Unfortunately, attaining economic and social development comes with disadvantages too. Yet, China has proved its strength and resilience with its quick economic recovery from the pandemic lockdowns, an indication that despite its ageing population, it can still tackle the crisis on time whilst achieving high-quality and sustained economic growth.

Written by Sophie Hassam

Sophie Hassam is a columnist at DecipherGrey.


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