China’s population is aging, thanks largely to the one-child policy in place for decades. And despite hopes that a big Communist Party meeting in Beijing this week would announce a relaxation of the policy, the plenum came and went with no action.
Optimists says we shouldn’t be discouraged by the party’s inaction this week. With China’s population likely to peak by 2020 and then start declining sharply, the government will have no choice but to act soon, according to Ting Lu and Xiaojia Zhi, China economists with Bank of America Merrill Lynch in Hong Kong. “We are highly convinced the Chinese government will announce a significant change (allowing families to have two children if at least one parent is a singleton) to the outdated one-child policy in the next few months,” write Lu and Zhi in a new report.
China’s not the only Asian country with a demographic problem. Japan’s population is aging faster than any other major economy’s, spurring demand for everything from adult diapers to self-driving cars. Neighboring South Korea has one of the world’s fastest-aging populations, too, with a birth rate of just 1.24 children per woman in 2011, well below the minimum replacement rate of 2.1 children. Singapore Prime Minister Lee Hsien Loong last November told Bloomberg News encouraging citizens to have more children is the city-state’s biggest challenge.
Asian countries are trying to cope. In Singapore, for instance, the government announced in January a plan to spend 25 percent more for fertility-treatment funding, paternity leave, housing assistance and other measures to encourage families to have more children.
South Korea’s government is trying to address a shrinking workforce by opening to immigration from places like Nepal; the number of immigrants has increased sevenfold since 2000, Bloomberg News reported in February, and immigrants as a percentage of the population could top 6 percent by 2030, compared to 2.8 percent now. Japan could benefit from immigration reform, too. Opening to immigrants could help Japan’s population problem and boost growth, Standard & Poor’s chief global economist Paul Sheard wrote in a report published last week. “Given Japan’s shrinking population and workforce, radical action should be taken to raise the fertility rate and embrace immigration,” he argued.
Unlike their counterparts in those countries, China’s leaders have an easier way to address the shrinking population: ease or end the one-child policy. That wouldn’t solve the problem, but it would help. The message from the official media is mixed, with some hints that sooner or later the government will make it easier for Chinese families to have second children, followed by denials that any change is imminent.
“China is now facing a looming aging crisis. Its working-aged population is in sharp decline, while the number of dependents is sky-rocketing,” state-owned CNTV.cn reported yesterday in an article picked up by the official Xinhua news agency. “But for now, those hoping for changes to the one-child policy remain expectant.” The Global Times reports that talk of a change is just a rumor and “how to improve the current family planning policy is still under discussion.”
