Taps Coogan – May 31st, 2022
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While the CCP is unlikely to recognize that China’s population is shrinking anytime soon due to political concerns, the prestigious Shanghai Academy of Social Sciences is forecasting that the population is on track to start shrinking this year.
China’s National Bureau of Statistics reported that China’s population grew by just 480,000 last year. That compares to eight million or so just a decade ago.
China’s fertility rate slipped to just 1.15 in 2021, down from 1.3 in 2020. That compares to 1.6 in the US and 1.3 in Japan, a country that is famous for is fast-shrinking population. Keep in mind that the US has a large net immigration rate that bolsters population growth despite a below-replacement fertility rate (a fertility rate of 2.1 is needed to keep the birth/death ratio neutral). China has the opposite problem.
Both Chinese officials and the UN were forecasting that China’s population wouldn’t peak until 2029 at the earliest, but private forecasts not built on the CCP’s politically motivated data have been calling for a peak much earlier. Covid and the recession in-all-but-name that China has been enduring this year appear to have dramatically suppressed births for the last couple of years, pulling forward the ‘peak’ date to right now.
As we have previously noted, while China’s working-age population has already peaked, according to the Shanghai Academy of Social Sciences, China’s population of retirees will be larger than its entire working-age population by around 2080.
For the economic implications of a shrinking workforce and aging population, see Japan. After decades of world-beating growth in the mid-20th century, growth that brought Japan as close to overtaking the US economy in the 1980s as China is today, Japan hit a demographic wall in the late 1990s and has seen near zero growth ever since.
China, unlike Japan which made the transition to a high-income country before its demographics peaked, is still far away from high-income status and has hundreds of millions of people still living on dollars a day.
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