Seeking Opportunities in Radical Changes in China's Population Structure

In the history of China's development, 2020 is a milestone which saw the successful fulfillment of the goal to build a moderately prosperous society and the 13th Five-Year Plan. This year, the COVID-19 pandemic and uncertain external environment will bring China's socio-economic development complex and difficult challenges ahead.

As a parameter closely related with socio-economic development, the tendency of demographic changes also became a topic attracting much attention and discussion.

The continuously falling birthrate, the slightly pessimistic fact of population aging, the controversial debate on delayed retirement, cities competing for talents, and the difficulties for college graduates to find jobs...these hot topics highlight the population and employment trends in 2020. The continuous population change will also bring China into a key turnaround period in the next 10 years.

Troubles seem to be right round the corner. While population gross is still growing, the speed of increase continues to glide, and by 2027 is expected to be close to 0. The process of population aging consistently deepens, and by 2025, almost 1 in 5 people will be a senior over the age of 65. The shifts in population policies resulted in total birth experiencing a short rise followed by continuous drop, and will likely retain this decreasing tendency. The percentage and scale of the working-age population is also declining, labor supply will evidently reduce.

However, we can still maintain our expectations. China remains the country with the largest population in the world, the enormous domestic consumer market hence keeps the resilience of China's economy. In addition, the number of university graduates repeatedly set new records, which indicates improving quality of the working population. By 2050, over 50% of the working population will have received college education, which is a significant boost to China's ongoing efforts to upgrade its industrial structure and transform its economic development model.

The radical changes in population structure will reshape our society and lives. The demographic changes in the next 10 years will cause "childbirth" and "providing for the elderly" to become two most important concepts in China's population policies.

To alleviate young people's anxieties over childbearing, promote families’ interest in having children, we call for government aid in establishing inclusive systems for nursery and education, and to relieve the burdens of raising children. China's child-bearing-friendly policies are relatively new, thus have limited impacts on encouraging birth. There is a long road ahead for us to raise our birth rate.

The problem of providing for the elderly is more urgent. Population aging will accelerae, where parents of children who were born in the 1980s under the one-child policy are gradually entering senility. The balance between income and expense of old-age pensions, expenditure of medical insurance, the tensions between demand and supply of healthcare resource allocation, the outburst in demand for senior care and nursing......from a more macroscopic view, population aging will result in reduction in society’s productive capacities and potential economic growth, and impact the ability for knowledge innovation, and weaken social vitality. How to handle these negative factors challenges the entire socio-economic system.

Nevertheless, every coin has two sides, and population aging does not have direct causality with economic growth. Besides, population aging has a positive impact in increasing the quality of human capital. Emerging technologies will reshape the outlook of life, and inspire our imaginations for an impending aging society. Should we grasp the key turnaround period in China's population development, fully upgrade human capital quality and labor productivity, public policies will have promising roles to play.

Each individual in a society needs to seek and create opportunities from current crises and challenges. Only when we arm ourselves with knowledge and technology, actively embrace the developmental opportunities brought by technological revolution, and lay a solid material and economic foundation, can we finally gain the initiative in solving problems.

Contributed by Yang Ge, Contract Research Fellow, Center for the Study of Xi Jinping Thoughts on Socialism with Chinese Characteristics for a New Era, Chinese Academy of Social Sciences; Associate Research Fellow, the Institute of Population and Labor Economics, Chinese Academy of Social Sciences

Translated by Zhang Junye