China: Population Collapse ‘Will Not Necessarily Have an Adverse Impact on the Country’

China’s state-run Global Times on Monday downplayed the significance of new data suggesting China has entered a period of significant population decline, essentially arguing that China’s prosperity over the past few decades has little to do with the size of its workforce.

The Global Times did not deny the estimate of a significant population decline released by the China Academy of Social Sciences in early January, although it also did not mention the analysts who think the report was excessively optimistic and China’s population is already both declining and aging.

Instead, the Global Times argued negative population growth “will not necessarily have an adverse impact on the country,” striving to present it as a natural and even beneficial phenomenon instead of the disastrous consequences of China’s now-abandoned one-child policy:

The aging of the population is an inevitable global trend marking social and economic development. With advances in healthcare, social security and gender equality in China, it is normal to see the population and labor force gradually decline after reaching a peak.

A large population has indeed provided abundant human resources. But looking at China’s four decades of reform and opening-up, the dramatic change has definitely not been driven solely by the huge population but has come about more as a result of reforms and improvements in economic and social systems as well as education and technology.

Other than fears of domestic consequences, there are concerns about China’s competitive power in the world. The World Population Prospects released by the United Nations in 2017 indicates that India will surpass China in 2024 and become the world’s most populous country. Some believe that China’s advantage of more hands to work may by then disappear.

These concerns are as well superfluous. With worldwide educational and technical progress, will a vast labor force poll still be needed in India and the global market? Moreover, China can still hold on to its favorable position backed by the continuous optimization of the quality of the workforce, the improvement of policies, and the ramping up of technological advantages.

This analysis misses the point that total national productivity is not the only concern, as well as deliberately underplays the benefit of cheap labor from a huge population brought to China during its late-century renaissance. The problem faced by almost every industrial society is the shortage of workers generating revenue to care for a huge elderly population.

Absurd pretenses of “lockboxes” and government benefits “owned” by the beneficiaries have largely been replaced in the Western world by the sober understanding that today’s workers finance government benefits for retirees with their tax payments. When the ratio of current workers to dependents falls too low, thanks to growing lifespans and declining birth rates, disaster ensues. Automation has a limited effect on this dilemma because it is not purely a matter of productivity and because robots do not pay taxes.

The actions suggested in the Global Times op-ed betray the premise that population decline is not a big deal. For example, the first suggestion is to “watch” changes in the Chinese population to “avoid large fluctuations in a short period of time.” Until shake-and-bake instant cloning techniques are perfected, there is no way to “avoid large fluctuations” in an immense population.

Birth rate changes in a large population are glacial, as the Chinese discovered when it suddenly abandoned One Child population control and began instructing young people that reproduction is their patriotic responsibility. As the Chinese example demonstrates, suppressing birth through legal penalties and forced abortion is much easier than encouraging it.

The second suggestion from the Global Times is to “improve the quality of labor” by spending more on education and “increase investment in science and technology such as artificial intelligence to replace manpower to an extent.” This, again, misses the point that the number of workers supporting the rest of the population is more important than productivity beyond a certain point. Artificial intelligence is giving social planners many restless nights as they ponder a “post-employment” future with a horrific shortage of human jobs. It is not likely to resolve the imbalance between dependents and workers.

“Third, increasing fertility is urgent. With the development of society, there does seem to be an ineluctable tendency to have fewer children or stay childless,” the Global Times concluded, effectively dynamiting the entire premise of the “population decline is not a problem” article.

The op-ed notes that “relaxed family planning policy” can have a “limited effect.” In fact, it had the opposite effect in China, where population began slipping after the one-child limit was raised to two.

The article attributes this to Chinese citizens worrying about the cost of raising a second child, a fear it suggests alleviating by providing more social services. If the core problem is a shortage of current workers to pay for social benefits, China may quickly find itself without the ability to finance more family services.

More worrisome is that apprehension about the cost of children does not seem to be the driving factor behind population decline in most countries. That “ineluctable tendency to have fewer children or stay childless” is a cultural attitude programmed across generations – rather forcefully in China’s case, given the penalties for those who conceived unlicensed children in the one-child era.