China Runs Out of ChildrenBy Asia Sentinel Mar 15, 2010 2:33PM UTC
The fruits of the one-child policy are maturing in 2010, writes Asia Sentinel
Much has been written about China’s future demographic crisis, summed up by the words “China will get old before it gets rich.” But it is seldom realized just how close China is to a tipping point – it is this year.
The workforce participation rate (percentage of the population aged 15-64 inclusive) peaks in 2010 at the astonishing level of 71.9 percent. The total working age population will peak five years later at 998 million, an increase of only about 25 million or about 0.5 percent annually. Those are not forecasts. They are already baked into the age statistics.
Workforce participation is set to decline only very slowly until well after 2020. But the impact of demographic change on economic growth is now. It is often forgotten how much growth during the reform period of the past 20 years been contributed by workforce expansion traced to the bulge in births in the years immediately before the introduction in 1980 of the draconian one-child policy. The workforce grew by no less than 33 percent to 973 million over that period and the participation rate went from 66.1 percent to 71.9 percent of the population.
Of course China is still relatively young with a median age of 31.3 compared with 36.7 in the US, 39.0 in Singapore 39.4 in France, 43.8 in Germany and 44.3 in Japan. The problem of a large population over 60 will not seriously impact China for another 25 years so change may not seem very dramatic. But its median age will now be rising rapidly, hitting 37.5 by 2020 and 42 by 2030.