Explainer | China’s population: the big picture of a greying society

It’s the biggest country in the world in terms of number of people but it is also shrinking and getting older as the fertility rate declines
These demographic changes present big challenges for government and the economy

China economy

SCMP Reporters

Published: 5:30pm, 20 Aug 2020

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China is the world’s most populous country, home to more than 18 per cent of the people on the planet.

But while its economy has expanded rapidly in recent decades, its population – estimated to be about 1.4 billion – has been greying.

By various estimates, China’s population could peak at around 2027-2029 then start to shrink, presenting serious challenges for the country’s health system and pension funds.

Where do most Chinese people live?

Most Chinese people live in the central, eastern and southern coastal areas, which have been among the fastest growing economies in the country.

The autonomous regions of Xinjiang and Tibet in the far west and Inner Mongolia in the north are among those areas with the smallest populations.

Chongqing, in China’s southwest, is the country’s biggest city, with more than 34 million people by the end of 2018.

Nearby, Chengdu, the capital of southwest Sichuan province, is home to 14.7 million people.

Other heavily populated regions are more economically advanced parts of the country.

The southern province of Guangdong, China’s manufacturing hub and the first region to embrace market reforms in the 1970s, is the country’s most populous province. Other major population centres include Jiangsu province and neighbouring Shanghai.

Will China’s population shrink?

Researchers from the Chinese Academy of Social Sciences forecast last year that China’s population would peak at 1.44 billion in the late 2020s then start shrinking from 2030.

Around the same time, India is expected to surpass China as the world’s most populous country.

How is this happening?

In the 1990s, China’s fertility rate fell below the level that a country needs to maintain its population, which is generally about 2.1 children for every woman of reproductive age.

The fertility rate was 6.1 in the 1950s and fell to 3 in the 1970s as China began to control population growth with measures such as the “one-child policy”, which restricted most couples to one offspring.

The fall continued as the country made the shift in the 1980s to a more urban society.

As birth rates fall, Chinese society is ageing rapidly.

In the early 2000s, 7 per cent of the population was at least 65, making China an ageing society, according to the World Health Organisation’s definition.

When more than 14 per cent of the total population is over 65, it qualifies as an aged society, a benchmark China is expected to reach by 2022, according to Chinese research firm Evergrande Research Institute.

If that forecast is accurate, China will have transformed into an aged society in just 21 years.

Japan took 24 years to make the same transition, while Germany took 40, Britain 46 and France 126.

What are the economic implications?

In an ageing society, a smaller labour force must support a bigger population of retirees, which could strain China’s retirement fund and slow the country’s innovation and economic growth.

In a 2019 report, the United Nations said governments could mitigate these effects by promoting employment among women, gradually increasing the retirement age and supporting a work-life balance to allow people more time to build a family.

How has population policy changed?

For most of Chinese history, people were encouraged to get married young and have more children.

It was not just a way of paying respect to elders but also provided labour for a largely agricultural society.

After coming to power, the Communist Party continued to promote growth in the 1950s and 1960s, offering financial incentives for families with more children.

In the 1970s, the party started looking into population control as part of the plan to better allocate scarce resources and accelerate China’s economy. This evolved into the “one-child policy”.

There were exceptions to the rule. Rural families with a firstborn daughter were allowed to have a second child once the first child turned four.

In 2015, China introduced the “two-child policy” allowing couples to have two children but this has not led to an increase in births. After the easing policy, the annual population growth rate moved up from 0.5 per cent to 0.54 per cent and 0.56 per cent for the next two years before falling to 0.36 per cent in 2019.

In 2018, China’s marriage rate fell to 7.2 per thousand, down from 9.9 per thousand in 2013.

How has China responded?

Chinese policymakers plan to delay retirement age and roll out incentives to promote marriage and childbearing. In May, the State Council, China’s cabinet, issued a directive that asks local government to find ways to make it easier for families to take care of children. Some suggestions include annual parental leave, extending maternity leave and setting up more child care facilities in communities.

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