Ageing, wealth gap pose threat to China
Deteriorating outlook for population growth may put drag on the country's expansion amid 'bad spread' of people's wealth, CVC warns
Private equity firm CVC Capital Partners said the mainland's slowing population growth and high concentration of wealth among a minority of its people posed key challenges for the world's second-largest economy.
"Everybody knows that China is not booming on the baby front," said Steve Koltes, a co-founder and co-chairman of the London-based firm, which has about US$50 billion of assets under management.
Speaking at an industry forum yesterday, Koltes said the country's population expanded at a paltry 0.5 per cent last year, slowing substantially from a rate of 5.8 per cent in 2010 and 11.7 per cent in 2000.
The deteriorating demographics outlook has alarmed policymakers as an increase in aged people comes amid a decline in the number of workers.
There had been talk of easing the country's one-child policy as the highly unpopular law, which has restricted couples to no more than one child for 31/2 decades, is condemned as a breach of human rights.
But hopes have been dashed again as no meaningful policies for the country's demographic reform were released after the third plenary session.
The unfavourable outlook for population growth might trim 3.25 percentage points off the mainland's annual economic growth by 2030, compared with double-digit growth in past decades, Citi economists said.