Latest / Trumponomics / Why China's Population Is About to Plunge

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Why China's Population Is About to Plunge · Trumponomics

• 0:02
  Speaker 1: China has surged in recent years to become the world's
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  Speaker 1: second largest economy, behind only that of the United States.
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  Speaker 1: But while China looks like a juggernaut, it's not invincible.
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  Speaker 1: The nation is facing a huge run up in debt,
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  Speaker 1: as well as a brewing trade war with the US.
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  Speaker 1: Yet there's one threat looming above all else, a declining population.
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  Speaker 1: On the second of our two parts special on falling
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  Speaker 1: fertility rates, we explore why Chinese women are having barely
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  Speaker 1: any children and what that means for the Asian powerhouse.
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  Speaker 1: Welcome to Benchmark. I'm Scott Lanman and economics editor with
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  Speaker 1: Bloomberg News in Washington. On last week's episode, we spoke
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  Speaker 1: with author Elizabeth Patkin about declining birth rates in the
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  Speaker 1: United States and the struggles that people like her have
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  Speaker 1: faced trying to overcome fortil problems. This week, we're turning
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  Speaker 1: our attention to China. The country is facing perhaps the
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  Speaker 1: biggest threat to its future, a population that's aging and
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  Speaker 1: about to shrink. Cy Young, professor of sociology at the
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  Speaker 1: University of North Carolina at Chapel Hill, is here to
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  Speaker 1: tell us more. He's an expert in the demographics of
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  Speaker 1: his native country, China, Professor PSI, welcome to benchmark my pressure.
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  Speaker 1: First things first, when and why did China institute the
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  Speaker 1: one child policy? China institute the one child part say
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  Speaker 1: in seventy nine slash nighties exact time as a little
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  Speaker 1: b mulky, because it was a decision in process. The
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  Speaker 1: main reason, as announced the while to achieve to help
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  Speaker 1: achieve the economic development and go China at the time
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  Speaker 1: has gdpeople cabita at about two d dollars and the
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  Speaker 1: goal was to reach about eight hundred dollars by the
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  Speaker 1: end of century. That means by two thousand and by
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  Speaker 1: some calculation. The way to ensure that to reach to
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  Speaker 1: reach that a goal was to controice population within one
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  Speaker 1: point to billing. That was the main reason. And what
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  Speaker 1: was China's fertility rate in the nineteen seventies before that
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  Speaker 1: policy was instituted, So the policy was institute in nine
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  Speaker 1: ten years before that, China facility was around six kids
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  Speaker 1: per woman issue and what is it now today today
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  Speaker 1: is about one point five. That's you know, one point six,
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  Speaker 1: you know, given the number is not published, that's my guestimate, okay,
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  Speaker 1: So it's less than a third probably of what it was.
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  Speaker 1: Before the policy. No, okay, let me just make sure
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  Speaker 1: we understand this. Before the policy, if we refer to
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  Speaker 1: nine and seventy nine, China's fraternity was at two point
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  Speaker 1: seven kids per woman because it had already gone down
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  Speaker 1: in anticipation of the policy. Basically, no, no, no, So
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  Speaker 1: there was a major push by the Communist Party in
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  Speaker 1: the nineties seventies called the name of the policy is
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  Speaker 1: called later, longer and fewer. The idea was very simple,
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  Speaker 1: we're basically pushing for later marriage, longer bus interview, and
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  Speaker 1: fewer kids. And in rough free seven eighty years, China's
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  Speaker 1: fraternity declined from rough free six kids to less than three.
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  Speaker 1: By nine seventy nine, it was already at two point
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  Speaker 1: seven two point eight in that range. Okay, So, thinking
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  Speaker 1: about that effort that you just mentioned and the one
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  Speaker 1: child policy in nineteen seventy nine, how much would you
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  Speaker 1: say the one child policy is responsible for the decline
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  Speaker 1: in fertility to about one point five or one point
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  Speaker 1: six today, Like you said, not a much, you know,
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  Speaker 1: so as in the number, uh what the number we
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  Speaker 1: decided we discussed, tell us the much of a change,
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  Speaker 1: the major part of a change happened before the launch
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  Speaker 1: of the one child particy in ninety eight, not ninety eight,
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  Speaker 1: all right, And there was a little bit declined from
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  Speaker 1: two two point seven in ninety seventy nine to rough
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  Speaker 1: rate one point six one point five ish right now,
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  Speaker 1: But that is not it should not be entirely attribute
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  Speaker 1: to the one child policy. We know in between those
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  Speaker 1: thirty five forty years that China's socio economical change it
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  Speaker 1: was enomous. So are you saying that you know, basically
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  Speaker 1: because of the increased wealth, because of the expanding economy
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  Speaker 1: in China. You know, the economic reforms that were also
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  Speaker 1: instituted in the late nineties seventies, did that play a
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  Speaker 1: bigger role in helping to spur decline in the fertility
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  Speaker 1: rate than the one child policy by itself did. So
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  Speaker 1: one child policy certainly had an effect, but if we
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  Speaker 1: look in longer term, we know were observed across the
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  Speaker 1: world when you know, society urbanized, when women's education increased,
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  Speaker 1: that the general trend that the fratility would decline following
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  Speaker 1: those general social economic development development. We demographers like to
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  Speaker 1: call this as demographic transition. So yes, one child policy
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  Speaker 1: had an effect, but if we look at longer term,
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  Speaker 1: the social economic development probably prayed a more important role
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  Speaker 1: that maintained China's fratility at a lower level. So let's
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  Speaker 1: talk about China's population now. At the time the policy
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  Speaker 1: was introduced, the country's population was just a bit shy
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  Speaker 1: of one billion. Today it's around one point four billion.
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  Speaker 1: Where is the population going from here? What's your forecast
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  Speaker 1: for what is going to happen in the next forty years? Okay,
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  Speaker 1: so the forecast is very clear. I think the best
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  Speaker 1: forecast has been done on mostly widely slide of the
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  Speaker 1: forecast has been the u n S population projection. Basically,
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  Speaker 1: China's population would turn around in the next ten years
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  Speaker 1: or so, you know, from positive growth. Right now it's
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  Speaker 1: getting close to the uh so called zero growth, but
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  Speaker 1: it will quickly turn around in about ten years, and
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  Speaker 1: then we will see a very fast job from that
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  Speaker 1: until in what level might end up at or where
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  Speaker 1: until we don't know where the end is, you know,
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  Speaker 1: right now we can only see the job probably all
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  Speaker 1: the way to the end of this century. But it's
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  Speaker 1: pretty that India will probably surpass China's as the world's
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  Speaker 1: most populous nation. Oh yeah, yes, that that that that
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  Speaker 1: is a done deal because the fraternity and even China
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  Speaker 1: turned around very quickly that we demographers causes as a
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  Speaker 1: population momentum. Basically, it takes a generation for the you know,
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  Speaker 1: the younger generations to get into a productive age and
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  Speaker 1: for them to reproduce again. You know what, we have
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  Speaker 1: already saying that Chinese population in terms of a cohoscide
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  Speaker 1: decline has been there for the last twoty some years now.
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  Speaker 1: Professor in China changed the one child policy to a
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  Speaker 1: two child policy, meaning people were officially or everybody was
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  Speaker 1: officially allowed to have two children instead of just one.
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  Speaker 1: Has that affected any of the population projections or caused
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  Speaker 1: people to have more children? Uh? Not much. So the
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  Speaker 1: hope was by relaxing this policy, more people will have
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  Speaker 1: a second child and increasing the fraternity overall and basically
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  Speaker 1: turned around the population trajectory. Unfortunately, you know what, do
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  Speaker 1: the numbers are now in that the two sounds seventeen
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  Speaker 1: we did not see a major increase. Actually comparing to
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  Speaker 1: two sounds sixteen, we saw a decline in total number birth.
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  Speaker 1: So given that trend and given you know that all
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  Speaker 1: the other major chance in China including urbanization and increasing
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  Speaker 1: women's education label for participation all those things. I don't
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  Speaker 1: say any time soon that China's fratility will bump all
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  Speaker 1: the way above the so called replacement level, So that's
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  Speaker 1: not really having any effect. And we had an article
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  Speaker 1: on Bloomberg recently that China is considering ending even the
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  Speaker 1: two child policy and allowing families to have as many
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  Speaker 1: alternate as they want. If that happens, will that have
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  Speaker 1: any effect or or basically none like the previous changed it.
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  Speaker 1: So you know, we will see on the two sides.
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  Speaker 1: One on one side, because China is a big country
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  Speaker 1: with one point for a billing in terms of number bus,
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  Speaker 1: that should have have an effect. That's so that the
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  Speaker 1: policy is the new policy would increasing the opportunity for
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  Speaker 1: a family to have some family to have three even
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  Speaker 1: focuss but overall on the macro level in terms of
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  Speaker 1: total frateritory rate or the total number bus at the
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  Speaker 1: entire country level, it should not and I don't anticipate
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  Speaker 1: any major impact at least in the near future. Wow,
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  Speaker 1: So what will happen to China's economic growth if the
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  Speaker 1: population does start to decline like the u n IS forecasting.
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  Speaker 1: The country has been reporting GDP growth of close to
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  Speaker 1: seven percent a year in recent years, is that going
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  Speaker 1: to go down significantly? So I'm kind of I'm not
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  Speaker 1: an economist, it's it's always kind of fascinating and interesting,
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  Speaker 1: intriguing at least to me. That why we like to
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  Speaker 1: connect fratility directly to the economic growth. To me, it's
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  Speaker 1: a more secondary, maybe tertiary thing. But indeed, if we
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  Speaker 1: look at longer term this, you know, building up of
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  Speaker 1: fraturity low faturity would lead to eventual decline of growth rate. Partly,
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  Speaker 1: we know the population requires the label for us new
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  Speaker 1: labels coming into the market. Partly, and more importantly, it's
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  Speaker 1: the aging population. Right now, China is setting its retirement
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  Speaker 1: age at fifty five for women and sixty uh for men,
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  Speaker 1: and with data population continue to increase, that will create
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  Speaker 1: a huge drag for the entire economy. Do you think
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  Speaker 1: that might cause China to open up its borders much
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  Speaker 1: more to allow more grants or migrant workers to come
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  Speaker 1: into work in the country or live there. And it's
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  Speaker 1: I think given the China size, migration probably will not
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  Speaker 1: be considered as a priority for Chinese party makers. But
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  Speaker 1: China is indeed try to entice certain selective migration entire
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  Speaker 1: certain population to migrante into China. More likely China will
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  Speaker 1: have to relax its retirement age or delayed through time
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  Speaker 1: and age, oh train its population to into certain segments
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  Speaker 1: of the labor market. Now, just going back to the
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  Speaker 1: one child policy for a moment, I lived in China
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  Speaker 1: for three years, and it's quite something to see a
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  Speaker 1: whole generation of people that have grown up without siblings
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  Speaker 1: as only children. How has the policy, or just the
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  Speaker 1: decline in fertility, if you want to put it that way,
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  Speaker 1: how has that affected Chinese life and culture in the
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  Speaker 1: last forty years. I think this is more fundamental, you know,
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  Speaker 1: in terms of social change to Chinese social psychology and
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  Speaker 1: social sense. Who Chinese individuals are connected to families and
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  Speaker 1: other people, and we now see that not just you know,
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  Speaker 1: this probity, not a fact of the mentality that's thinking
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  Speaker 1: of the younger generation. It also affects is the older generation.
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  Speaker 1: How they So for example, I hear people talking about
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  Speaker 1: now I mean retirement age. My responsiblity to my grandchildren
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  Speaker 1: is not as of the older thinking. It's my responsiblity
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  Speaker 1: to raise the third generation. They want to live there
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  Speaker 1: more useful retirement life. So that's very, very different scenario
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  Speaker 1: than whether we you know, the stereotypical of Chinese family.
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  Speaker 1: It really is a remarkable change that has happened in
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  Speaker 1: Chinese society over the last for you to fifty years,
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  Speaker 1: Professor Side, one more question. Fertility is not just a
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  Speaker 1: long term driver of economic growth, but you know, it's
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  Speaker 1: something that you can also look at that can even
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  Speaker 1: show whether a recession is coming. Is that is that right? Yeah?
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  Speaker 1: So you know, that's a very very good example. In
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  Speaker 1: the United States, the fertility decline into solvesand seven preceded
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  Speaker 1: the recession of two thousand seven two soldand eight. So
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  Speaker 1: that says something because it takes ten months to conceive
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  Speaker 1: a baby, so that means the families and the mothers
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  Speaker 1: knows quite a bit about economy before the recession even hit.
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  Speaker 1: That's a great example. It's definitely something that we could
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  Speaker 1: be watching to see when the recession will come or
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  Speaker 1: when a recession will happen in any country. Professor cy
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  Speaker 1: Young of the University of North Carolina, it's been a pleasure.
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  Speaker 1: Thank you so much for being with us on Benchmark.
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  Speaker 1: Thank you. Benchmark will be back next week. Until then,
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• 14:32
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• 14:36
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