China is facing a major problem: For the first time in six decades, fewer people live in the huge country. That also means fewer workers – and with it a shrinking economy. Beijing needs to rethink.
China is the country with the most people in the world. India follows shortly thereafter. The world’s second most populous country to date may overtake China this year. The demographics expert Yi Fuxian even suspects in an interview with China.Tablethat India has long since caught up with the People’s Republic in terms of population.
It’s happening, albeit very slowly: China’s population is shrinking, for the first time since the 1960s. At the end of December, the People’s Republic had 1.4 billion inhabitants – around 850,000 fewer than a year earlier, according to the Beijing Statistics Office.
Last year, the birth rate was just 6.77 newborns per 1,000 people – the lowest it has been in decades. Fewer than 10 million babies were born in one year for the first time in China’s history.
Birth control ‘hard-hitting’
“The introduction of the one-child policy was simply a total political miscalculation,” analyzed Katja Drinhausen from the Mercator Institute for China Studies in the ntv podcast “Learned again”. The Chinese government thought they could limit people to one child for a few decades and then reverse the trend. But that didn’t work, says the head of Chinese politics and society.
China introduced the one-child policy in 1980. The Chinese government wanted the population to stop growing for fear of food shortages. The country was still reeling from the great famine of 1961. Back then, millions of people died because they didn’t have enough to eat.
In fact, fewer children were born after birth control began. However, this was combined with sometimes brutal measures such as the forced use of IUDs and forced abortions, which were “implemented harshly,” reports Katja Drinhausen. Girls were aborted en masse because boys were long considered the better earners. Couples who broke the one-child rule had to pay hefty fines.
An aging population, a surplus of men and fewer people overall were and are the consequences in China.
The one-child family as an ideal
To change that, strict birth control was abolished in 2016. From then on, couples were allowed to have two children instead of one, without being punished for it. Last year it was relaxed even more, parents are now allowed to have three children. In mid-February, Sichuan province abolished all caps on children, including unmarried couples. However, the hoped-for birth boom has not yet materialised. A little more children were born for a short time in 2016.
A Chinese propaganda poster from 1978 shows a happy nuclear family with a father, mother and one child.
(Photo: picture alliance / dpa)
That doesn’t surprise Katja Drinhausen. The dynamic is difficult to reverse, the researcher explains in the podcast. For decades, campaigns have conveyed the image that having a child is ideal. “There were posters or murals in the villages and towns that said a civilized family only has one child and can then focus all resources on it. Of course, that sticks.” The Chinese can now hardly imagine more than a child. They have gotten used to the small family.
What’s more, in China’s competitive education system, raising a child is simply very expensive. “You can only get anywhere in China if you have a good education,” explains the China expert. From the day care center to the university degree, everything costs a lot of money. “In principle, you invest a large part of your salary in the child for years and decades. That is perceived as a very heavy burden”. According to Katja Drinhausen, these high investments cannot be offset by small grants or child benefit.
“China needs jobs for well-educated people”
One in five Chinese is currently over 60 years old. There are fewer and fewer people of working age between 15 and 59. Over the next few decades, by 2050, the labor force will shrink by a million-fold, by nearly 250 million people in total, the Department of Human Capital and Social Affairs predicts.
The fact that the relationship between young and old is tipping has a massive impact on the economy. China fears a labor shortage that could slow economic growth. “Looking at the labor market, you can no longer live off the demographic dividend, i.e. from many young employees, some of whom are not very well trained, who produce things for little money,” says Katja Drinhausen in “Wieder was deutsche” – podcast. Factories have been lacking workers for a long time. With an aging, smaller society, the “workbench of the world” can no longer mass produce as it used to. Especially since the government is planning economic growth of around five percent for this year.
“We now need a completely different economy and a completely different labor market, namely jobs for well-trained people who work in these areas for a long time,” concludes the expert. China has to move towards higher added value and better products. “That means a social and economic adjustment.” The labor shortage is creeping in: the Chinese government and companies still have a few years or decades to adjust to it.
If China’s economy grows less, the impact on the global economy would be huge. Because no country exports anymore – the economy is also the second largest importer after the USA.
Social and pension system hardly developed
The older China’s population becomes, the more expensive it becomes for the state. Fewer and fewer workers will have to look after the elderly in the future. “China has undergone very rapid economic development over the past few decades, but the social and pension systems are not yet very well developed,” analyzes Katja Drinhausen. China grow old before it gets rich. “There are gaps in supply.”
If you later don’t have a family to take care of you, you are at risk of poverty in old age. Some experts even fear a humanitarian catastrophe.
Another consequence of China’s one-child policy is gender inequality. The national economy has nearly 35 million more single men than women, the census found. About half of the men are of marriageable age. They mostly live in the country. “Sometimes there are entire regions where many men cannot find women,” reports the China expert in the podcast.
In larger cities it is the other way around: there are more and more women who marry later or not at all. The result is a surplus of well-educated, unmarried women there. “These structural problems, that there are men who cannot find a woman, but also women who cannot find a man, is a China-wide problem,” says the researcher. An imbalance that probably doesn’t exactly promote the birth rate either.
More money for families is “not a quick fix”
In order to compensate for the surplus of men in the countryside, China recruits women from poorer Southeast Asian countries – as wives. “Some of this happens voluntarily because China sometimes simply offers more opportunities. Migration to China actually happens to improve life. But of course there are also the downsides, namely human trafficking,” explains Drinhausen.
What can China do to make the birth rate rise again? Allowing more children doesn’t seem to be the solution. Experts are calling for the government to give parents much better financial support. The Beijingers YuWa Population Research think tank expected that tax incentives, more money for home ownership and the construction of kindergartens would bring something. But also longer parental leave, flexible working hours and an educational reform.
China expert Drinhausen does not see a quick solution in subsidies or child benefit. Among other things, it would help to equip schools better and more evenly, “so that parents don’t always have to worry that their children will fall behind if they don’t make it to one of the few elite schools.” Ma Li, a former member of the China Research Center for Population and Development, says China needs to become more family-friendly overall.
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