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China risks getting old before it gets rich

Beijing, April 27, 2011

The harsh logic of China's one-child policy is starting to unravel, and census data to be released on Thursday may well stoke debate whether the ageing nation should relax restrictions.     

Demographers worry that without change, China will become the first country in the world to age before it gets rich.

Once seen as key to averting a Malthusian disaster of over-population, China's choke on family size to usually one child in cities and two in the countryside now threatens its economic future, many demographers say, with fewer people left to pay and care for an increasingly grey population.

They say maintaining that policy is a mistake with profound implications for the world's second-largest economy.

"China is on a downhill demographic vehicle in terms of low fertility and rapid ageing," said Wang Feng, director of the Brookings-Tsinghua Center for Public Policy, who specialises in China's demographics.     

"By continuing the one-child policy, the effect is to step on the gas pedal. It's a vehicle that's going downhill and you're making it go faster. That makes no sense."     
Chinese demographers, and even members of the Communist Party-run parliament, have called for looser restrictions. Those wanting change may seize on the data, when China reveals the main findings of its 2010 census, the last since 2000.

Still, experts say the government will be reluctant to abolish the policy, as anxious as ever about feeding its people who account for around one-fifth of the world's population.

Proponents argue that smaller families -- using less resources and with more to spend on the children they do have -- was crucial to economic success and will remain so.

"China will not adjust current family-planning policies, and has not studied making adjustments to those current policies," an official from the country's family planning authority said last year, according to a report from the Xinhua news agency.

For now, the one-child policy remains a key plank of government thinking, and its enforcement can be brutal.

The 2010 census numbers could show China has 1.41 billion people, compared to 1.27 billion in the 2000 count.   It is also expected to show a shrinking number of young people, growth in the number of elderly and the fastest urbanisation in Chinese history, according to demographers.

Since the last national census in 2000, a pool of millions of young workers has powered China's roaring export sector, catapulting it to the world's fastest-growing major economy.

That pool is drying up. Wang said the median age of the Chinese population is now 34 years old. He estimates that by 2050, half the population will be 50 or older, assuming the fertility rate is 1.6.

That will place enormous strain on the country's finances and could threaten the underpinnings of the economy, which needs a young populace to drive consumption.

The population dependency ratio, the proportion of those too young or old to work, is seen rising for the first time after falling for over 40 years, while the ratio of those aged 15-59 is predicted to peak and then slowly start to fall.

When about 25 percent of the population hits 60 years and above, their level of per capita income will be, at best, only a third of the level of Western ageing countries, said Wang.

And in China, the transition will happen in three decades, compared to Europe, which has aged gradually over the past 100 years, said Du Peng, deputy director at the Center for Population and Development Studies at Renmin University.

Economists say the government is ill-prepared. "At the moment, the biggest problem is that there is no comprehensive social security coverage," said Wang Xiaolu, an economist at the China Development Research Foundation. "There is a large number of people not covered by social security." - Reuters




Tags: China | population | Census | demographers |

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