[Correspondent Diary] The Aging China

China Enters Aging Society... Natural Population Growth Rate 0.034%, Mortality Rate Maintains Around 7% Annually
China+ Inflation Concerns Step Up

[Asia Economy Beijing=Special Correspondent Jo Young-shin] '0.752%, 0.718%, 0.034%'. These are statistics related to China's population.

[Image source=Yonhap News]

Last year, China's total population was 1.4126 billion (excluding Hong Kong, Macao, and Taiwan). Officially, it remains the most populous country.

However, looking at the birth rate, it seems difficult to maintain the number one position. Last year, China's birth rate was 0.752%. That means 7.52 births per 1,000 people last year. This is the lowest since the founding of the People's Republic of China in 1949.

On the other hand, the death rate was 0.718%. The number of people born and the number of people who died in one year are almost the same. The natural population growth rate is 0.034%.

China's natural population growth rate in 1949 was as high as 16%. Except for 1960 (-4.57%) and 1961 (3.8%), when the Great Leap Forward movement that triggered the Great Famine began, China's natural population growth rate increased by double digits every year. The natural population growth rate peaked at 33.5% in 1963 and gradually decreased, falling into single digits for the first time in 1998 (9.14%).

Although the Chinese government abandoned the 'one family, one child policy' and introduced the 'two-child policy' in 2016, the situation did not change.

Eventually, the Chinese leadership announced the introduction of the 'three-child policy' last year, but the decline in birth rates accelerated further. It has plummeted every year from 6.53% in 2016 to 5.58% in 2017, 3.78% in 2018, 3.32% in 2019, and 1.45% in 2020.

However, the natural population growth rate is estimated to be even lower. Jilin Province, Liaoning Province, Ningxia Hui Autonomous Region, and Tibet Autonomous Region have not yet released population data. Also, Jiangsu Province, Heilongjiang Province, Qinghai Province, Chongqing, Beijing, and Shanghai have not announced specific birth rate data.

It is estimated that population is declining very sharply not only in economically developed cities but also in rural areas. Among China's 31 provinces, municipalities, and autonomous regions, at least nine are believed to have recorded negative natural population growth rates.

Since 2008, the death rate has remained in the 7% range every year, while the birth rate has fallen, causing the natural population growth rate to plummet without bottoming out. The fact that the death rate remains in the 7% range indicates that China has entered an aging society.

Concerns about China's population decline have been raised for more than a decade. There have been claims that China will no longer be able to serve as the 'world's factory' due to a decrease in the labor force. The 'Lewisian turning point' is a representative theory. It argues that China's economic growth has reached a limit due to a shortage of cheap labor. Looking at China's population statistics over time, this theory and claim are not incorrect.

China's cheap labor affects global commodity prices. When China's labor costs rise, commodity prices increase. The rise in prices of Chinese goods affects global inflation. This is called Chinaflation (China + inflation).

Chinese authorities are also concerned about population decline. They are well aware that the status of the two major powers (G2) comes from labor force. To the extent that even allowing foreign nannies is being discussed.

Chinese media such as Pengpai are analyzing the causes of population decline and introducing ways to increase birth rates, raising awareness about the population decline. It is interesting to see how China, a socialist and controllable country, will solve the difficult problem of the population cliff. If this problem is not solved, China may regress to the past.