Will depopulation sink China?

In the following article, Adnan Akfirat, Chairman of the Turkish-Chinese Business and Development Friendship Association, and a member of our advisory group, analyses the recent demographic changes in China, which see the population not only age but start to fall, with India on course to become the world’s most populous nation this year, if it has not already done so.

Adnan notes that whilst a young population has a positive impact on economic development, it is not the only way to develop. What is really important is to increase labor productivity. He further dissects the media claims that these trends are a harbinger of an economic crisis in China, noting that, “on the contrary, the history of western developed countries has proven that fertility rates tend to decline and the desire for children tends to decrease as societies become wealthier with better living standards.”

He also looks at ways in which China is dealing with this issue, noting that with around 10 million graduates every year, the country’s population advantage is shifting from quantity to quality. With massive investment, China has already surpassed the US in robot density and has the aim to double its robot manufacturing by 2025 compared with 2020.

Adnan concludes: “Since China has developed thanks to socialism, not cheap labor, population decline will not sink China’s economy.”

This article originally appeared in the Turkish daily newspaper Aydinlik.

China has been the most populous country in the world for hundreds of years. In 1750, its population was estimated at 225 million. This was more than a quarter of the world’s population at that time. India, which was not a united country at that time, had a population of about 200 million and was in second place.

India will become the world’s most populous country this year. The UN estimates that India’s population will overtake China’s on April 14, 2023. India’s population this year is expected to be 1 billion 425 million 775 thousand people. (1)

China falls back to second place

China will fall to second place in the world in total population for the first time in more than 60 years, since 1960, when the UN began keeping China’s population records. The population of the People’s Republic of China fell to 1 billion 411 million 800 thousand people last year, while the population growth rate fell to negative. The population growth rate in China this year is minus 0.6 per thousand people.

China’s National Bureau of Statistics announced that deaths outnumbered births in China this year and the total population decreased by 850,000 people. Last year, 9 million 560 thousand babies were born in China. However, this number was 10 million 620 thousand in 2021.

The death rate per thousand people in China was 7.37 per thousand last year. The difference between the birth rate and the death rate per thousand people was 6 per ten thousand. China ended the one-child policy in 2016 and lifted all restrictions in 2021. But birth rates have continued to fall.

As the number of new births falls, China increasingly becomes an aging society. By the end of 2022, China’s population aged over 60 reached 280 million people. The proportion of elderly Chinese reached 18.9 percent. By 2035, this proportion is expected to rise to 30%, or more than 400 million people. China’s working-age population (those between the ages of 16 and 59) totaled 875.56 million by the end of 2022, 62 percent of the population. The number of working-age Chinese peaked a decade ago. By 2050, the country’s median age will be 51.

The average retirement age in China is 54, one of the lowest in the world. There are discussions about raising the retirement age. However, objections and opposition to this view are growing. China’s economic miracle was driven by an increasing proportion of working-age adults compared to children and the elderly from the 1970s to the mid-2000s. With fewer mouths to feed, parents were able to invest more in each child than they otherwise would have been able to.

A young population has a positive impact on economic development, but it is not the only way to develop. What is really important is to increase labor productivity.

Causes of population decline

In China, people are marrying later and having children even later due to longer schooling.

The YuWa Institute for Population Research, a Beijing-based think tank, found that China is one of the most expensive places to raise children, and concluded that it is these economic concerns, rather than the ban, that are the reason why women do not want to have more children.

Women in China prefer to have children at a later age. Since 2000, the average childbearing age in China has increased by three years, from 26 to 29. In all middle-income countries, of which China is a part, the average childbearing age has increased by only one year.

The average age at marriage has also increased in China. According to China’s 2020 census data, the average age of marriage for women increased from 24 in 2010 to 28 in 2020.

China also has one of the highest abortion rates per 1,000 women aged 15 to 49, according to estimates by the Guttmacher Institute.

Another problem is that more people migrate out of China than migrate into China.

In 2021, for example, China experienced a net migration of an estimated 200,000 people. In the early 1990s, about 750,000 people a year were leaving China. (2)

The West’s fascination with China’s population

Some Western media outlets have used China’s declining population growth as a flag to prove that China is “collapsing”. Unfortunately, the Turkish press has joined the chorus. In fact, they have only one argument: “China’s ‘demographic crisis’ means that the economy is faltering and the pace of development is declining.” They cite a long list of figures and calculation methods and come to a single conclusion: China will not overtake the US economically! They reintroduce the fallacy that China is developing with cheap labor.

The New York Times went even further. “China’s Decline Became Undeniable This Week. What Now?”, it headlined, claiming that China will age before it gets richer; that a shrinking population will cause economic decline; and that China’s weakness will spread to the world economy. (3)

On the contrary, the history of Western developed countries has proven that fertility rates tend to decline and the desire for children tends to decrease as societies become wealthier with better living standards.

China’s solutions to population decline

It is clear that socialist China will not leave the development and prosperity of its people to nature.

Indeed, the number of students in China’s colleges and universities is constantly growing. Chinese higher education institutions produce around 10 million graduates every year. This means that China’s population advantage is shifting from quantity to quality. The CPC’s 20th National Congress emphasized that relying solely on population numbers and remaining in the labor-intensive industrial chain will not be China’s future path.

China has found the most effective and viable solution to the decline of its working-age population. According to the International Federation of Robotics “World Robotics 2022” Report, China has surpassed the US in robot density.

China’s massive investment in industrial robot technology has placed the country at the top of the robot density rankings, surpassing the US for the first time. The number of industrial robots relative to the number of workers in China has reached 322 units per 10,000 workers in the manufacturing industry. Thus, China ranks fifth in the world in terms of the intensity of robot use. The world’s top 5 most automated countries in manufacturing in 2021 are: South Korea, Singapore, Japan, Germany and China.

Marina Bill, President of the International Federation of Robotics, said: “China’s rapid growth shows the strength of its investments so far. There are still many opportunities for automation in China.” (4)

China is by far the world’s fastest growing robot market. The country has the highest number of annual installations and has had the largest stock of working robots every year since 2016.

The Chinese government is not content with this success. According to the action plan published on Thursday, January 19, 2023, China will seek to double its manufacturing robot density by 2025 compared to 2020.

The action plan, jointly published by the Ministry of Industry and Information Technology and 16 other relevant departments, stated that a “robotics+” action will be launched to expand the use of robotics.

The use of service and specialized robots will be significantly increased by 2025, and the capacity of the country’s robotics industry to promote high-quality economic and social development will be markedly improved, the plan said.

The plan also lists actions to build a collaborative innovation system for robot production and application and to improve robot application standards. (5)

Since China has developed thanks to socialism, not cheap labor, population decline will not sink China’s economy!