US Census Bureau’s Latest China And India Projections
The US Census Bureau on Tuesday released its latest population projections for 227 countries and territories, but what is grabbing the most attention are their figures for China and India (click here for press release).
In particular, the Bureau sees China’s population shrinking from 2026, a year after which they expect India to become the world’s most populous country. The key reason for this anticipated shift is fertility rate differentials. India’s fertility rate is 2.7 babies per woman, whereas China’s is less than 1.6 (the population replacement level fertility rate is around 2.1). China’s fertility rate is also behind the US (just over 2.0). China’s population is also ageing rapidly.
So what does all this mean?
Firstly, China is at risk of becoming old before it becomes rich, as many have postulated for some time. A shrinking and ageing population could leave it in a similar position to Japan, except at a far less prosperous level in terms of per capita GDP. That said, China’s economy is bound to keep expanding for many more decades, meaning that China’s per capita GDP should continue increasing for some time.
Secondly, China probably needs to do away with its one-child policy, which has been in place since 1979. Although the policy has been relaxed in recent years, it has created a huge male-female gender imbalance as couples have favoured having male babies.
Thirdly, China will have to tolerate immigration to top up its young population. China is already a diverse nation, but it might have to become much more so to absorb immigrants.
Fourthly, China needs to create a comprehensive national pension system so that its elderly is well looked after.
Overall, China’s demographic situation does not portend disaster. As I have mentioned previously on this blog, demography is not necessarily destiny. However, it is clear that the Chinese authorities will need decades to smooth out some of these imbalances.
