China's demographic challenges

David Willetts makes some important points about Chinese demography in today's Financial Times (subscribers only), Why China stands to grow old before it gets rich. Nothing especially new, but worth stating all the same:

One reason for China’s stellar growth is that it is at a demographic sweet-spot. The massive reduction in infant mortality achieved by China’s barefoot doctors in the 1960s and 1970s is now yielding a surge of young workers – an extra 10m working-age adults per year. China’s challenge now is just to absorb them into the labour force. Add to that the massive population flow from the countryside and you can see why wages are low and growth is so fast. There are few pensioners and there are not many children either. The rabbit is indeed in the middle of the python.

More over the fold...

As early as 2015, China’s working age population will actually start falling. By 2040, today’s young workers will be pensioners – in fact the world’s second largest population, after India, will be Chinese pensioners. There could well be 100m Chinese people aged over 80, more than the current worldwide total, as Richard Jackson and Neil Howe point out in their excellent paper, The Graying of the Middle Kingdom (CSIS 2004).

Because of China’s one-child policy there will be fewer new workers under its so-called “4,2,1” population structure – four grandparents, two parents and one child. This is a demographic transition that many countries go through. But a process that is taking a century in the west will take 40 years there. The desperate rush for economic growth is fuelled by fears that China could grow old before it grows rich.

Not so long ago, China was one of the world’s most youthful countries, with a median age of 20. Its median age is now estimated at 33. By 2050, the United Nations forecasts, China’s median age could be 45, against 43 for the UK and 41 for the US.

Older countries are good at incremental improvements in productivity that come from age and experience. But they are not good at the type of improvement in performance that comes from doing things differently. Radical innovation seems to come from youth.

Another important dimension to all this is that China does not have a strong civil society. What it does have instead is strong family ties. Old people are the responsibility of their families, and about two-thirds of people aged over 65 in China live with their children. Only 1 per cent of those over 80 are in old people’s homes, compared with 20 per cent in the US.

Imposing the one-child policy on these long established customs is having an extraordinary effect. If you can have only one child it becomes highly desirable to have a boy. The rule is not as strictly enforced as it was, but you can now see its effect on the second child, which in the eyes of many Chinese really is the last chance to have a boy. For every 100 female second children, there are 152 males. Overall, there are now about 120 boys for every 100 girls in China.

The country is waking up to this extraordinary imbalance. Last year it banned ultrasound testing to try to stop gender-based abortion. But already it means China is facing a world not unlike a traditional Oxbridge college, with far too many men relative to women. That is why we can already read in the media accounts of young women being bribed or even kidnapped from places such as North Korea or Vietnam. China is going to have to attract large-scale female immigration or many of its young men will leave.

Gender balance can shape a society’s values. If men are in the majority, their negotiating position is weak and they have to be prudent and hard-working to win a wife. If women are in the majority, it is their negotiating position that is weak and men can get away with being irresponsible and feckless. (One theory about the problems of America’s inner cities is that there is a shortage of young men because of large-scale incarceration and high levels of military service.)

So China is going to be full of old people and rather earnest, frustrated young men. It will be one of the most dramatic and unusual demographic changes the world will have seen for a very long time, and Chinese leaders now would do well to plan for such a future.

Comments

[E]

Well as you can imagine I really warm to this one :).

I have linked to you from Afem, and I recommend the academic paper I have there as a more in-depth analysis of the implications.

[Bloodbat]

"Because of China’s one-child policy there will be fewer new workers under its so-called “4,2,1” population structure – four grandparents, two parents and one child."

[sigh] Overrrrated. Buddy, come on, do some fact-checking-- do you really think that Chinese families in general follow a "4,2,1" pattern? The One Child Policy is only really applied (and partially so) to urban regions, where a minority of the population lives, and even then to a demographic subgroup that has tended to opt for smaller families anyway of its own accord. It's hardly applied at all to the vast rural regions of China, where it's still quite common to have 4 or 5 kids for family. When I was in China 5 years ago-- after decades of the One Child Policy-- it was striking to me how many families still adhered to the traditional 4-5-kids-to-work-the-plow rule that we associate with rural countries in general. And in fact, that's pretty generalized. Official bureaucrats routinely undercount the numbers in Chinese villages b/c they get more financial rewards for reporting lower numbers, but Chinese vaccine makers always make much more vaccine than the official numbers b/c they know they're an underestimate. When you use more accurate data sources-- such as vaccine distribution statistics for example, or ob-ward records at rural health centers (which themselves, of course, don't count the number of kids born at home), you get a birth rate for China that's about 2-2.1-- just below replacement level and above that of Western Countries in general, with a total population of 1.4 billion and still growing.

As for the male-female imbalance problem? Yeah, they've got it, and it's their own damn fault, but the numbers are exaggerated. 120:100 M:F? C'mon, buddy-- once again, you've gotta be more rigorous about your figures. When Chinese families have daughters, if they *are* concerned about having more than one child (which, again, really isn't much of a concern on the countryside), they simply hide their daughters from the census-takers, sending them to relatives and friends, bribing the bean-counters, and so on. Every serious Chinese demographer knows that the number of kids in general-- and the number of girls in particular-- is vastly underreported. Even the official stats on e.g. the CIA Factbook and the Statistics Bureau show a ratio of about 111:100, and when the underreported figures are considered that drops to about 109:100. Still a big excess compared to the 106:100 ratio found in the US and the rest of the world, but not as bad as other figures make it seem. As for those poor farmers who do wind up without a pretty wife after all their hard work? That's why women from Korea, Vietnam, Indonesia, and the Philippines are so popular. So what imbalance there is, becomes China's neighbors' problem more than China's itself.

[Lafayette]

"Gender balance can shape a society’s values. If men are in the majority, their negotiating position is weak and they have to be prudent and hard-working to win a wife. If women are in the majority, it is their negotiating position that is weak and men can get away with being irresponsible and feckless. "

I liked this. It reminds me of recent televised reports from the Animal Kingdom regarding behaviour.

We are, after all is said and done, still animals ... aren't we?