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China’s demographic transition presents new opportunities

ZHAO YUFENG | 2017-11-30
(Chinese Social Sciences Today)

 
 

China’s two-child policy may lead to another round of increase in birth rate. The new family planning law taking effect in January 2016 allows couples to have two children, ending the one-child policy that had lasted for decades.


 

Demographic transition describes the reduction of birth and death rates as a country or region industrializes. It is the modernization process manifested through demographic phenomena. The first demographic transition took place during the rapid industrialization and urbanization of some Western European countries, such as the United Kingdom, France and Germany, in the early 20th century. China’s demographic transition differs from that of the Western countries and thus calls for theoretical innovation.

 

Regional, group differences
Embracing a vast territory and a large population, and also undergoing social transformation, China’s demographic transition is more complicated and happens in various dimensions. It is influenced by the disparities in regional culture, institutions and technological development. The following are some characteristics. 


The first is that there has been a rapid decrease in birth and death rates, while at the same time, population aging has been intensifying. During the first 35 years after the founding of New China, the death rate decreased by 60 percent from 20 per thousand to 6.8 per thousand. Then it settled between 6 per thousand and 8 per thousand for the next 30 years. The infant mortality rate dropped from 150 per thousand in the 1950s to 80 per thousand in 1970, and declined to 8 per thousand in 2015.


The decline of the birth rate occurred later than that of the death rate, but the speed was as quick. According to official statistics, China’s birth rate fell from 34.1 per thousand in 1969 to 12.1 per thousand in 2015. As birth and death rates declined, the average life expectancy gradually increased to 76.34 in 2015.


At the end of 2015, there were 222 million people aged 60 or over, accounting for 16.1 percent of the whole, while 143.86 million people were 65 years or older, accounting for 10.5 percent of the whole population.


According to the United Nations, a society is regarded as an aging society if more than 10 percent of the population is aged 60 and above. By this standard, China has become an aging society. To reach this standard, France took 115 years, Switzerland 85 years, the United Kingdom 80 years, and the Unites States 60 years, but in China the process only lasted 18 years from 1981 to 1999. China developed into an aging society at a high speed.


The demographic transition exhibits different characteristics in different regions and social groups. Different regions in China have varying geographies, economic development levels and customs, thus exhibiting different demographic transition patterns. In general, the transition of the West lags behind that of the east and other regions, and it is still at its later stage. The birth rate in the east is already low enough but in the West it still has room to fall further.


Also, there are differences between the birth rate of the Han nationality and that of other ethnic groups. According to the 2010 population census, the birth rate of the Han nationality was 1.18, while that of the four major ethnic groups—Zhuang, Hui, Manchu and Uyghur— were 1.59, 1.48, 1.18, and 2.03 respectively, three of which exceeded that of the Han nationality. The difference is mainly due to disparities in social and economic development.


The second is volatility. Demographic transition in developed Western countries is based on advanced social and economic development, therefore, it is relatively stable. However, China is still a developing country, and national conditions prevent its population measures from taking full effect. The instability of the changes in birth rate has resulted in an incomplete demographic transition. Birth rates increased twice during the period from 1980 to 1987. Amid the trend of gradual decreasing birth rate, the newly implemented two-child policy may lead to another round of increase in birth rate. 


The third is the interaction between the family-planning policy and social, economic development in the process of demographic transition. It is tempting to attribute China’s rapid decrease in birth rate in the 1980s to the one-child policy. However, American scholars William Lavely and Ronald Freedman noted that the transition actually began prior to the policy, and they theorized that it was because of improvements in education and urbanization.


Chinese scholar Chen Wei analyzed the influence of social and economic development as well as the family-planning policy on the birth rate in 1980, 1990 and 2000 by comparing provincial statistics. He found that the influence of the policy decreased while that of social and economic development increased over time. Now that the two-child policy is in effect, social and economic development can be expected to become the overriding factor affecting demographic transition.

 

Economic, social governance
China’s unprecedented demographic transition poses challenges to social and economic development. For example, labor costs are rising due to the shrinking labor pool; there is a growing demand for elder care, and the gender imbalance will make it hard for many to find spouses. These challenges have produced severe pressure for the government and society in a short time period.
However, just as the population equilibrium theory states, population is in constant interaction with external factors, such as the economy, society, resources, and the environment. These challenges may serve to realize the transformation from the low-grade population equilibrium to high-grade population equilibrium. Therefore, we should also see the opportunities produced by the demographic transition. To be specific, there are three aspects of opportunities.


Firstly, demographic transition can propel transformation of economic development mode. Population plays a significant role in developing economy and the vast labor force is the necessity for China’s economic boom. China proposed to change the economic development mode very early, but the process is progressing slowly.


In the process of demographic transition, a labor-intensive economy becomes increasingly unsustainable while the improving quality of the population promotes the development of high-tech industries and emerging strategic industries.


Statistics shows that in 2015, the average education received by China’s labor force was 9.28 years and the figure for new-comers in the labor market even exceeded 13.3 years. Among the new generation of migrant workers, mainly post-80s and post-90s, those with at least a junior high school education accounted for more than half of total migrant workers; and also, the portion of workers with higher education is increasing.


While there is no big change in population quantity, quality improvement is a major feature of the new demographic transition theory in China. Quality labor force will become human capital to accelerate the transformation of economic development mode.


Secondly, demographic transition promotes reform in social governance mode. The geographical manifestation of demographic transition is urbanization. As growing numbers of people flood into cities, urban social governance is increasingly a problem. Facing challenges, related departments have begun to seek technological solutions using the internet, the Internet of Things and big data.


The new social governance mode divides regions into several grids and then integrates all resources, including personnel, land and organization into the grid to realize meticulous, dynamic governance based on informatization, greatly enhancing social governance work.


Nevertheless, in rural areas, a more feasible social governance mode should be explored, because there are many children and senior people in the rural areas left behind without caring.


Third, demographic transition forces people to change the conception of population. For example, traditionally, seniors are considered only as consumers and they are believed to make no contribution to social productivity. In fact, many elderly people are engaging in production activities. In addition to daily care of children at home and volunteering, they also contribute to economic development through paying taxes, consumption and investment.


Postponed retirement is a heated topic nowadays. According to a report released by the National Academy of Development and Strategy at Renmin University of China in 2016, the policy of gradual postponed retirement can enhance labor force supply and economic growth remarkably. Especially, during the first 25 years after the policy is put into practice, it can increase the labor force by 2 to 3 million and can increase GDP by 0.5 percentage points every five years.


Also, psychologically, seniors themselves are not willing to totally retreat from social life after age 60. Now, many elderly who are just around or past the age for retirement actually still have the ability to work and hope to remain in the workforce. Hence, society needs to provide more varied working mode for the elderly.

 

Zhao Yufeng is from the School of Sociology and Population Studies at Renmin University of China.