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China's population

China’s rust-belt province wants people to have more babies, but is it too little, too late?

Once a centre for industry, Liaoning has fallen on hard times, but a vague government plan to put things right is unlikely to make any difference, an analyst says

PUBLISHED : Thursday, 12 July, 2018, 5:31pm
UPDATED : Thursday, 12 July, 2018, 10:17pm

Liaoning has become the first Chinese province ever to release a long-term demographic plan that officially encourages families to have more children, as it seeks to mitigate the impact on its economy of an ageing and shrinking population.

In a document released last week, the local government said: “From 2016 to 2030, the ageing [of the population] will accelerate, the trend … is obvious”.

Once a centre for industry, Liaoning has seen its fortunes fade in recent years and has been battling to shore up its economy and prevent a population exodus.

“The proportion of the working-age population will decline [and] all these [factors] will slow down the potential economic growth, weaken the demographic dividend, increase the pressures on the old-age welfare system, health care system and pensions,” the document said.

Although Liaoning achieved 4.2 per cent economic growth in 2017 – the United Kingdom managed only 1.8 per cent and the United States 2.3 per cent – it ranked just 28th of 31 Chinese provinces for the year.

In 2016, Liaoning’s economy shrank by 2.5 per cent, while in 2015 it grew by just 3 per cent, in both cases leaving it bottom of China’s provincial performance charts.

In January of this year, the provincial governor admitted long-standing suspicions that some of its economic data, including fiscal revenue, was faked between 2011 and 2014.

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In its demographic plan, the Liaoning government said it has set a target to increase its population to 45 million by 2030, from 43.7 million at the end of last year.

While it provided no details of how this would be achieved, it said it would encourage families to have more than one child.

The document was equally vague on how the authorities planned to tackle the problem of a dwindling labour force, making only woolly suggestions about talented people not leaving the area and retirees returning to work.

China’s infamous family planning regulations, which restricted most couples to having just one baby, were replaced with a nationwide “two-child policy” at the start of 2016. However, many cities are still fighting to keep their populations down, so actively encouraging families to procreate is a first for Liaoning.

The province’s population has been shrinking for many years. In 2017, its fertility rate – or the number of children a woman is expected to have in her lifetime – was 0.9, making it one of the lowest in China and the world, and suggesting its population will halve within a generation. In developed nations, the fertility rate necessary to maintain a steady population is generally stated as 2.1.

China’s aggressive population drive comes at a cost

Irrespective of the vagueness of Liaoning’s recovery plan, the province’s fate might already be decided, according to Huang Kuangshi, an associate research fellow at the China Population and Development Research Centre, a government think tank.

Liaoning’s poor economic performance was directly linked to the demographic changes the province had experienced over a prolonged period, he said, so it did not matter what form the planned incentive scheme took, as it would be “too little, too late”.

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The government, and Beijing, might have to bite the bullet and accept Liaoning’s fate, he said.

“Given the population decline is inevitable, Liaoning might just [have to] let it go,” Huang said.

“With a lower population density, the province could be forced to consider a different pathway, perhaps even becoming an ecology preservation zone.”

Despite the stark forecast, the researcher made clear that China’s demographic problems were not unique to Lioaning.

“The whole country should reconsider its population layout,” he said.

China gets richer provinces to help revive rust belt economies

According to figures from the National Statistics Bureau, despite the relaxation of the one-child policy, the number of new births in China fell by 630,000 in 2017 from the previous year.

By 2040, citizens aged 60 and above will account for 28 per cent of the country’s population, up from 12.4 per cent in 2010, the World Health Organisation forecast in a 2016 report.

In a bid to improve the distribution of financial resources for the elderly, Beijing last month launched a new programme that allows it to appropriate pension funds from provinces that have a surplus and move them to those with a deficit.