China View: Population Crisis Continues To Burden Beijing
d3sign
China has been facing a growing population crisis marked by an aging workforce, declining birth rates, and high youth unemployment. By the end of 2022, China’s population has decreased by 850,000, 9.56 million births and 10.41 million deaths, compared to the end of the 2021.
This decline in population growth has been a constant trend in the country since the implementation of population control measures and family planning policies such as the one-child policy in 1979, which prevented many families from having more than one child. This policy and its enforcement by the government was highly successful in curbing population growth.
However, these policies were too effective. Since 1992, the fertility rate has been fluctuating and declining. In 2023, births were at record lows. In addition to the effect of past family planning policies, other factors leading to low fertility include demographic factors such as reduced fertility motivation, delayed age of marriage and first birth, as well as socioeconomic factors such as rising childcare costs. China’s aging workforce and high youth unemployment exacerbate this issue.
Approximately 94 million working people, around 12.8% of China's 734 million labor force, were older than 60 in 2022, which is up from 8.8% in 2020. There are also issues within the aging population such as retirement and pensions. China’s number of working people has fallen by more than 41 million in the past three years, demonstrating the lingering effects of the coronavirus pandemic on the economy as well as a decline in the working age population.
There are concerns that these issues will not only continue to negatively impact the economy, but also have direct implications on other integral sectors such as agriculture. In an effort to address this population crisis, the government has continued to implement a combination of policy shifts and incentives.
The long-term implementation of one-child policy has resulted in an “imbalance of the sex ratio at birth, the shortage of labor resources, and severe population aging”. Due to these issues, the two-child policy was announced in October 2015, allowing all couples to have two children.
Initially this policy shift was quite successful leading the fertility rate to increase by 12.95% in 2016 and 12.43% in 2017. However, the policy was insufficient and its effect on fertility behavior was limited in the long-term. The principal issue facing Chinese population development has shifted from rapid population growth to low fertility and aging.
In recent years, the dramatic decline in China’s fertility level has been influenced by several socioeconomic factors, including rising housing costs, increasing costs of child-rearing, and high youth unemployment. The increasing percentage of elders along with increasing life expectancy has also been a significant challenge for the Chinese government and continues to greatly strain the social security system. The number of active taxpayers supporting the retirees has also been decreasing as a result of the declining working population.
National Bureau of Statistics
Due to these issues, many within the aging workforce are forced to continue working longer to support themselves. Many also only had one child due to birth limits enforced from 1980 to 2015, which limits the likelihood of financial stability after retiring. High youth unemployment further compounds this problem. Even remote rural positions have seen intense competition from young Chinese citizens with diplomas from top universities.
“If I worked for three or four years after my undergraduate studies, my salary would probably be similar to what I get now with a master's degree.”
-Zephyr Cao, recent graduate from China Foreign Affairs University
In an effort to address this population crisis, the government has continued to implement a combination of policy adjustments and incentives. In China’s 14th Five-Year Plan, the government detailed how they intend to address concerns regarding population aging. The goals of this strategy included achieving a moderate fertility level, improving infant and child development policies, improving the elderly care service system, and improving job opportunities.
Due to limited effectiveness of the two-child policy in boosting fertility levels and births, the government announced a three-child policy in 2021. Alongside this policy, the government also launched supporting measures including steps to improve the country’s fertility support system. The government is also reportedly working on improving supportive measures that aim to incentivize couples to have more children and encourage births, including policies relating to childcare, taxation, housing, and women’s rights in employment.
The government rolled out one of these incentives in March of 2022 which allowed taxpayers to deduct a fixed amount of 1000 yuan ($141.74) per month for each child under the age of three. They have also utilized other means to promote birth rates such as the use of propaganda to encourage couples to “have children for the country”. Additionally, women are discouraged to delay marriage to pursue their careers and abortion access, which was once widely available, has become more limited and controlled.
China has one of the lowest birth rates globally and has been trying to incentivize young women to have children. Many, however, remain apprehensive due to the high cost of childcare, worries over job security, and the economic climate. “China’s middle class no longer see marriage as the only path to security, and are choosing to forgo a traditional family life and prioritize careers”. The Chinese government has also recently announced that it will be limiting overseas adoption in an effort to curb its negative population growth. While more than 160,000 Chinese children have been adopted internationally, how effective can this policy shift be in addressing China’s population crisis?
In response to the aging of China's population as well as the need for elderly pensions and support, China’s 14th Five-Year Plan outlined how the government intends to address the pension problem, including by raising the retirement age. The government also plans to bolster its social security fund to help support its rapidly aging population. Recently the government announced that the retirement age for men will be raised from 60 years old to 63 and 55 and 58 for women based on their occupation.
The new policy aims to ease the decline in the working-age population, address the aging problem, and help promote economic growth. The new policy also highlights employment support for younger and older workers. This could boost productivity to address the challenges of an aging population, although it risks adding to public discontent over working into an older age and fear of increased competition for jobs.
“Don't think that delaying retirement is just to make you work for a few more years, not exactly that, because you probably won't be able to find a job before you reach 65, but you won't be able to get a pension until you're 65. #Implement a gradual delay in the mandatory retirement age#”
- Response from user on Weibo (X-like media site)
It is important that the Chinese government continue to implement policies to address its population problem as it is expected to have negative implications on economic growth and development. China’s aging workforce poses a substantial threat to the country’s food security and agricultural economic resilience. China’s population aging has led to a decrease in the size of the working-age population and a decline in the labor participation rate, which can severely hinder the development of China’s agricultural sector.
Currently, China also has a surplus of milk and dairy products that is potentially linked to falling birth rates and this decline in demand has forced smaller farmers out of business, which further illustrates the broader implications of these issues. To incentivize birthrates and address the country’s aging population problem, China should focus on implementing policies to ease the economic burden on prospective families. Efforts should include alleviating rising housing prices, increasing investments in public education, and addressing the issue of excessive competition in the workplace. It is also important for the government to continue to utilize media platforms to actively promote positive attitudes toward marriage and childbearing.
