An ageing China needs to grasp the immigration nettle now

Although China’s new two-child policy will stimulate consumer demand, its impact to replenish the ageing workforce will not be felt until two decades from now. China’s working population peaked already, and its decline will accelerate.

While China is expected to overtake the US as the largest economy in the next decade, it is unclear how long it will keep that position. In contrast to China’s ageing work force, the US will keep on adding young people, including some of the best and brightest from China. For China’s economy to keep pace with the US, it has to pour in a lot more investments, which is unsustainable, or innovate faster , which is difficult.

For all the wrongs (and rights) of the US economic system, it has the unassailable advantage of population growth. From now to the middle of this century, the US population is expected to grow by a third, to 440 million. Most of that growth will be driven by immigration, which has contributed great dynamism to the US economy.

From more than four times the US population today, China’s population may fall to about three times the US level by the middle of the century. Such an adverse trend will be slightly moderated by China’s latest two-child policy. But to arrest its ageing population, China would need the twin engines of pro-birth and immigration.

Many may be drawn by China’s economic opportunities – if not disheartened by the difficulties of learning the language. And they will grapple with issues such as internet censorship. The late Lee Kuan Yew saw China’s difficulties in attracting international talents as a key challenge to its rise. In this context, ethnic Chinese may be a good place to start.

First, Beijing may start with its former citizens. Of the 3.5 million mainland students who went abroad since 1978, half have remained overseas. Some have acquired foreign citizenships and residencies. They are arguably the most natural targets: armed with foreign education and experience, yet more ready to be reintegrated to their country of birth. If they are granted long-term visas in China, with similar access to education and health care as locals, more may return.