China Has An Age Problem
How understanding demographics can show us the future
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China’s population has been in the news a lot recently because they have just released their census results and they are scary. There just aren’t enough babies being born.
A traditional population has more children than adults and more adults than aged people, creating a ‘demographic pyramid’. That is how it still looks in Africa, whereas Europe has flattened off due to increased life expectancy and fewer children.
China does not have a traditional population pyramid. It is alarming and spiky instead.
The graphs below show how China has changed over the last 40 years, a period which has coincided with tremendous growth. They are taken from Gapminder — an outstandingly informative site set up by Hans Rosling and family.
There are multiple reasons for the odd shape of these graphs.
- In 1960 the average life expectancy in China was 44 years.
- Of the babies that were born, 130 out of 1000 died before the age of 5. That is one in seven.
As a result, the generation that was born during Mao’s “Great Leap Forward” (Famine years) doesn’t have as many people in it as those born in the early 1950s. This has a knock on effect on the next generations: creating a trough 20 years after the famine years, made worse by the One Child Policy.
After the ‘7000 Cadres’ conference in 1962, many of the methods used during the famine were changed, healthcare and nutrition improved and life expectancy surged to 60+ years by 1972.
As we can see by comparing the two graphs, the ~100m people that were ~10 years old in 1979 are largely still alive (now just past 50 years old).
Since then, China has continued to improve health and well-being.
In 2020, life expectancy is 77 years and only one in a hundred die before the age of 5.
This shows the incredible progress made by China in the last 60 years, made possible by a booming economy and better social infrastructure.
Manipulation: One Child Policy
China introduced the one child policy in 1979. The generation that was being born in the late 1960s and early 1970s was increasing the population rapidly, by surviving infancy, which led to the new rule.
The one child policy was in place from 1979–2016. It has had a monumental effect. This can be seen most clearly in the peak we see in their early 30s, compared to their children (the bulge less than 10 year olds).
37 years with a skewed sex ratio (males were preferred) and birth rates per woman at less than 2.1 replacement rate, means there is a whole generation of the workforce missing.
The one child policy has also proven hard to escape from since it was abandoned in 2016. Births have dropped to approx 1.3 per woman in the latest census (2021). It has become a cultural norm to focus your attention on one child, rather than ‘splitting your resources’ to bring up two children. This has helped contribute to an era of ‘little princes’, where kids (mostly boys) are doted on and have had less social interactions without siblings to practise on.
This happens to the extent that they are sometimes unable to care for themselves. This is likely to mean that they will also be less good at caring for others (like their parents).
What might happen?
In an economic sense the twin peaks are great now. ‘Watch out’ the rest of the world! It is a very productive workforce when 50 year olds and 30 year olds make up the bulk of the population.
It can’t last. The uneven nature of China’s demographics mean that this advantage will be fleeting, and the average age will move rapidly northwards, with 20m-25m people (similar population to Australia) hitting retirement every year from 2025 onwards.
From a nationalistic perspective, the important thing for China will be how they use the next 10 years to reshape the world in their favour.
China currently has a relatively young retirement age at 60 yrs for men and 50 yrs for women. This will create a major burden on the state, as well as a less productive workforce overall. The worry for China is that the next workforce are unable to support the increased number of retired people.
I predict the government will increase retirement ages in the next 5 years (which will not be a popular change). It will affect hundreds of millions of people.
Women may be brought more into line with men as well, which will be more like the rest of the world.
Depending on the wealth available in the wider Chinese population by 2025, the wave of people reaching retirement may lead to an exodus from cities, as people go back to live a quieter life. In the last ten years China has become more urban — increasing to 64% of the population in an urban area.
This is likely to continue for a while, but the ageing population may reverse the trend. It might also lead to a surge in demand for leisure activities, such as Mahjong halls or even international tourism if travel becomes more widespread again.
In industry, there will be greater demand for automation as the workforce becomes less mobile. These industries will be aiming to supply products that are designed to help older people, from care homes to crutches.
There is also a massive hole expected in China’s state pension fund by 2050, which the government will need to rectify which they could do by funding from somewhere else, by raising pension contributions or increasing salaries (and hence contributions).
As China becomes an unavoidable part of all our lives, keep looking out for all the demographic information you can find. It should keep you ahead of the curve.
You can read more stories on this topic and many others at my profile.
Life expectancy statistics: https://www.macrotrends.net/countries/CHN/china/life-expectancy
Infant mortality rates (UN Data published on Statista): https://www.statista.com/statistics/1042745/china-all-time-infant-mortality-rate/
