The decline in demographic dividend in China

During the peak of China’s rise, the country benefited greatly from the “demographic dividend in China”, when the majority of the population comprises young people of working age (25-54 years). But, now, this trend is reversing at high speed, and in the future, we will see the significant effects of this, along with the effects of China’s population decline. A new demographic forecast by the United Nations Population Division estimates that by the end of this century, China will no longer be the most populous country in the world. The interesting thing is that, according to the latest projections of the United Nations, China will have a population of 1.53 billion by the year 2100, almost half of India’s population. If we want to talk about the nearer future, we can say that by 2050, India will have a population of 1.67 billion, still about 300 million more than China.



China’s one child-per-couple policy after demographic dividend in China

During the last 25 years, the People’s Republic of China has undergone demographic and economic changes of historic proportions. Demographically, China has transformed itself from a “demographic transitional” society, where reductions in mortality led to rapid population growth and subsequent reductions in fertility led to slower population growth, to a “post-transitional” society, where life expectancy has reached new heights, fertility has declined to below-replacement level, and rapid population ageing is on the horizon. In the not-too-distant future, in a matter of a few decades, China’s population will start to shrink, an unprecedented demographic turn in Chinese history in the absence of major wars, epidemics or famines. In this process, China will also lose its position as the most populous country in the world.


Economically, China has transitioned from a socialist, centrally-planned economy to a market-based economy. From a socialist economy that was closed to the outside world and plagued by low efficiency and stagnation, China has become, in the last two decades¸, one of the most dynamic and fast-growing economies in the world. In less than twenty years, between 1982 and 2000, China’s real GDP per capita, as adjusted for purchasing power parity, quadrupled, a record unmatched worldwide.


 At the start of these historical transformations, China’s leaders adopted the improvement of the standard of living of the Chinese population as its new political mandate and the basis for political legitimacy. They formulated two basic national policies: (i) developing the economy and (ii) controlling population growth. The Government of the People’s Republic of China announced its one child-per-couple policy in 1980, an unprecedented governmental intervention in the population. Such an extreme policy came about even though the fertility level in China had already more than halved during the previous decade and was already at a level not much above the replacement level.




China’s changing population age structure in brief.

The changes in China’s population age structure resemble the transformations experienced elsewhere in the world; those of China are different in other ways. The changes in the age structure in China, as in other countries, are driven by declining mortality and fertility. During the last half-century, mortality decline in China resulted in a nearly doubling of life expectancy from 42 and 46 years for males and females, respectively, around 1950 to 71 and 75 years in the year 2000. Mortality decline was especially rapid during the two decades after the early 1950s when life expectancy increased yearly (Banister and Preston, 1981). Fertility decline started as early as the 1950s in parts of urban China. By the beginning of the 1970s, it had extended to the whole country (Lavely and Freedman, 1990; Wang, 2001). Assisted by the government’s birth control programme that called for later marriage, longer birth intervals and fewer births, China’s fertility level was more than halved within a decade. 


From 5.8 children in 1970, the total fertility rate (TFR) dropped to 2.3 in 1980. Despite the newly implemented one-child policy, the fertility level in China fluctuated around the replacement level of 2.1 in the 1980s (Feeney and others, 1989; Feeney and Wang, 1993). In the 1990s, however, China’s fertility reverted to its downward trajectory. By the end of the twentieth century, fertility was well below the replacement level, or around 1.6 children per woman. China’s population age profile contains some unique characteristics resulting from its history of social and demographic changes. Two such special characteristics are particularly important to changes in the population age structure. The first is the drastic fertility decline within a relatively short period, rarely seen elsewhere. The second is a sharp increase in mortality and a plunge in fertility caused by the Great Leap Forward famine of 1959-1961. The famine resulted in an estimated 30 million premature deaths and 33 million lost or postponed births. Later, however, a sharp rebound in the birth rate became evident and lasted for several years in the 1960s. 


How China’s Demographic Dividend is Deciding?

The share of people over 65 increased from 8.9% in 2010 to 13.5% in 2020. If citizens over 60 were also included in the estimate, it would reach 18.7% (+5.44%). Simultaneously, the working-age populace dropped to 63.35% (-6.79%), and the birth rate fell to 1.3. The replacement fertility rate is 2.1. Thus, the current deficit is as high as 0.8. This figure is worse than that of the United States (1.7) and the birth rate in Japan (1.4), which has been struggling with a similar problem for decades. Males accounted for 51.24% (723.3 million) of the population, while females for 48.76% (688.44 million). The male-to-female ratio was 105.07 males per 100 females. The gender disparity that has persisted over the years is, to a significant extent, a result of the abortion policy promoted by the authorities since the 1970s. The one-child policy favoured male offspring, who carried the family name, inherited property, was better suited for farm work and had the duty to take care of their parents.


Before the data was released, some Western media and experts predicted that the census would provide information about the first population decline. The official data did not confirm these forecasts, but one should consider that the actual scope of the crisis might be covered up, for instance, by including people who have so far remained outside the system in the census. 


The year 2021 marks the 100th anniversary of the founding of the Communist Party of China. The Communist Party of China cannot rule out that the authorities did not want to link this event to a symbolic failure of the PRC’s family planning policy. In an article in the South China Morning Post, Dr Yi Fuxian, a scientist at the University of Wisconsin-Madison, points out that the actual number of births might be several million less than what the official government statistics show. In his opinion, birth rates and population size have been overestimated by the NBS for years. According to his calculations, China’s actual population in 2019 was 1.279 billion, 121 million less than the officially reported 1.4 billion. 


Additionally, Yi Fuxian questioned data regarding the number of births. He argued that there were 10 million of them instead of 14.65 million, as reported by the NBS in 2019. The census confirmed a strong trend toward urbanization. Figures presented by the NBS showed that more than 900 million people resided in urban centres, accounting for 63.89% of the total population. This has increased by more than 14 percentage points since the 2010 census (49.68%). The Chinese government predicts that the urbanization rate will reach 65% in 2025 and 75% in 2035, while 19 city clusters will serve as the engine of the Chinese economy.



As China moves into the second half of the demographic dividend period and begins to experience demographic ageing, increased labour market participation by the aged and women will be crucial to economic development. However, employment rates for aged people and women in China continue to decline, especially in the urban sector. Moreover, unless China can improve access to education and employment opportunities for middle-aged and elderly people, especially baby boomers, who have remained in the rural sector, the costs associated with the ageing of the population will escalate. To reduce the cost of ageing, China will need to focus on human resource development and skill development for middle-aged and aged people, including the baby-boom generation.

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