Dear MEL Topic Readers,
Study: China faces 'unstoppable' population decline by mid-century
Two scores ago, China started to set a limit on the number of children parents could have. The restriction is called “one-child policy” and had been implemented strictly until 2015 when the ruling party raised the limit to two. However, things seem to have changed during the four decades and the policy change from “not to” to “allowed to” hasn’t shown a significant change in the number of newborn babies.
In those days, the more children meant more production and wealth. The cost to raise children had never been so high until the new millennium when more parents started to want their children to receive higher education. Also, their lifestyles started to change, and parents tried to invest and save money for retirement. Thus, China’s natural birth ratio per woman has been declining like other Asian countries, such as Japan and Korea. Now, the fertility rate hovering just around 1.6, way lower than 2.1 to maintain the population, the population is estimated to decline from the peak at 1.44 billion in 2029. This means the dependency ratio, the number of economically contributing people to non-working people (under 15 and over 64), will become higher, which will cost more to the social welfare budget while domestic consumption will be declining. Not good news for the second largest economy in the world.
Enjoy reading and what population decrease could mean to the world leading economy.
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