Among the major topics expected to be discussed during the Two Sessions is how to tackle the country’s flagging birth-rate, after it recorded the first population decline in six decades in 2022. But should China be worried about the declining population? And how much of an impact will the demographic change have on the country’s economy? Our reporter Zheng Chunying explains in this episode of “About China”.
ZHENG CHUNYING, Beijing “Last year, China’s population shrank for the first time in six decades, decreasing by 850,000 to 1.4-billion, sparking concern about the economic impact of the demographic change. Could the population decline really spell doom for economic growth? Here’s what one economist has to say in response.”
XU GAO, Chief Economist, Bank of China International “The impact of the demographic dividend on economic growth is not that big, because the change of the demographic of a country is super slow and on the other hand, the quality of the workforce has been increasing very fast in the last ten years thanks to China’s improving education system.”
ZHENG CHUNYING, Beijing “And let me give you a sense of what that might mean. The number of Chinese workers with graduate degrees reached 218 million last year, compared to 46 million in 2000 and 120 million in 2010. That’s according to the State Statistics Bureau. Official data also shows workers aged 16-59 across China completed an average of 10 years of education, up by 0.18 of a year compared to 2020.
Accelerated urbanization is also expected to contribute to China’s long-term productivity growth. China’s urbanization rate is around 64 percent, that’s 14 percent higher than a decade ago. The prediction is that it’s likely to continue to grow by another five percent over the next five years, which could mean up to 70-million new workers across China’s cities, potentially increasing workforce capacity by around 3.5 percent.”
And according to the Mr. Xu Gao, factors such as capital growth and technological advancement are also expected to drive economic growth.
XU GAO, Chief Economist, Bank of China International “The growth of China’s capital accumulation is very fast and thanks to R&D, China will have very decent technology advancement in the coming years, so despite the demographic change, we believe that the potential growth in the coming years will be around six percent.”
ZHENG CHUNYING, Beijing “A falling population is expected to pose a range of challenges for China’s economy going forward. But it’s hoped an increasingly specialized skilled workforce, will help offset some of the negative impact, supporting long-term productivity and economic growth in the years ahead.”