Editorial | Declining birth rate could sink China’s development goals

The trade war has dented China’s economy, but the country is still posting healthy growth rates and the annual per capita income of Chinese has surpassed the symbolically important US$10,000 mark. Leaders’ aspirations of development goals being attained so that a modern nation with global influence can be created by 2050 are well on track. Before such dreams can be realised, though, a solution has to be found to a declining birth rate that last year fell to levels not seen since 1961. Without reversal and far-reaching reforms to health care and pensions, the fast-ageing population could sink hopes.

That would put economic growth and development plans in jeopardy; fewer people means less domestic consumption and revenue from taxes, which hastens the economy’s slowdown. The number of elderly will increasingly outstrip that of the young, who would be evermore called on to support and care for the aged in society. The burden could be enormous; the older a population gets, the greater the need for health and rehabilitation care and funds to ensure pensions and lifestyles.

Population controls are partly to blame. Couples were restricted to having one child from 1980 until the policy was relaxed in 2016 and two children were permitted. During that time, apart from fewer babies, a cultural preference for boys meant less girls. But apart from a spurt in the number of births in 2017, growth has continued its steady decline. Parents, wanting opportunities and the best possible jobs for their children as an insurance policy for old age, pour resources into education and extracurricular activities, leaving little desire to raise more than one child.

The pressure on young people is enormous; apart from being expected to excel at all they do, they will eventually have to support both parents and four grandparents as well as their own children. As with any rapidly developing society, China is in danger of falling into the “middle income trap”, where economies stagnate as incomes reach median level and those in the middle class put lifestyle ahead of having more babies. More Chinese women are also putting careers ahead of marrying and raising families. As in the developed world, Beijing faces a dilemma – finding a way to increase the population while pushing ahead with and attaining growth targets.