Aging Population Imperils Prospects for Chinese Economy’s Growth

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Chinese woman holds a baby while a government official gives a speech.

China Insights

Going by official statistics published by the Chinese government, the Chinese economy will overtake the U.S. by 2028, having grown by 2.3 percent in 2020 while most other industrialized countries saw negative GDP growth due to the coronavirus pandemic. 

Premier Li Keqiang announced China’s growth target as being 6 percent for 2021, while experts have expressed skepticism about the published figures, noting that the total numbers are larger than the sum of China’s investment, consumption, government spending, and net exports. Economists have warned that actual growth figures for the Chinese economy could be around zero or even negative — even Premier Li himself admitted years prior that the official statistics were inflated. 

In China, information is tightly controlled, and the data that comes from the Chinese Bureau of Statistics and General Administration of Customs is hard to verify. Because it’s so hard to find detailed and credible data, accurately projecting the future Chinese economy is a formidable challenge.

But another factor, one long in the making, directly threatens China’s prospects of becoming the world’s largest economy.

Industrialization, urbanization, and population control have severely curtailed China’s birthrate, while the number of senior citizens will soon outnumber young working-age people. 

Each March, the Chinese authorities hold the assembly of the National People’s Congress and the national committee of the Chinese People’s Political Consultative Conference (CPPCC) — commonly known as the Two Sessions. 

Lowering the age of marriage

Lu Xiaoming, member of the CPPCC National Committee and Vice Dean of the Law School of Guangdong University of Finance and Economics, said he would propose at the Two Meetings that the Chinese authorities lower the minimum age of marriage to 18. The current minimum ages are 20 for women and 22 for men. 

A large young workforce is the main driver of a country’s economic development. It also reduces the amount of money the government and people have to spend on healthcare and retirement funds. An aging society declines sharply in labor efficiency and its ability to create wealth. Demands for medical care and various health services rise, and the pressure on the social welfare system increases significantly.

An aging population may be imperiling the Chinese economy.
This photo taken on August 5, 2020 shows nursing mothers Wang Chao (L) and Chao Anya speaking at Wang Chao’s guitar store in Shanghai. An aging population may be imperiling the Chinese economy. (Image: STR/AFP via Getty Images)

In an interview with Voice of America, demographic expert Prof. Yi Fuxian said that “in 1980, the median age of the population was 22 in China and 30 in the U.S.” However, by 2018, “the median age was 42 in China and 38 in the U.S. If China’s fertility rate stabilizes at 1.2, meaning 1.2 children per woman of childbearing age in her lifetime, the median age in 2035 would be 49 in China and 42 in the U.S.; in 2050, it would be 56 in China and 44 in the U.S.,” Yi predicted. 

“China’s aging rate is much higher than that of the United States, and if we follow such a curve, China’s economy would probably not surpass that of the United States.”

The populations of many countries experience aging, due to a variety of factors including rising costs of living and shifting cultural expectations. But in China, this transformation was worsened by the One Child Policy. In 1981, the CCP established a powerful organization in 1981—the Family Planning Commission—to enforce the one-child policy.

Doctored Chinese economy data, institutional incentives

As early as the year 2000, Chinese demographers had warned that China’s birth rate had dropped to 1.2, and recommended scrapping the one child policy. But officials at the Family Planning Commission inflated the data, giving a much higher projection of Chinese fertility rates.

Critics say that the Commission had an institutional incentive to produce fake data, even if it would bring disaster to China’s future. 

For over 10 years, the game of inflated numbers continued until it became apparent that the problems of employment and pension deficits in China did not match the country’s birth numbers. In 2016, the Chinese government finally allowed a family to have two children.

In 2018, the Family Planning Commission was merged into the Public Health Commission of the State Council, greatly reducing its authority. China officially announced that 13.62 million babies were born in 2018, whereas the Family Planning Commission’s earlier projection was 18 million.

To make matters worse, population figures published by the Bureau of Statistics before 2018 are directly based on data submitted by the Family Planning Commission. This data is likely false as well.

A mother and her daughter rest on the Badaling Great Wall during the Tomb Sweeping Day on April 5, 2014 in Beijing, China. The aging population in mainland China may bring long term troubles to the Chinese economy.
A mother and her daughter rest on the Badaling Great Wall during the Tomb Sweeping Day on April 5, 2014 in Beijing, China. The aging population in mainland China may bring long term troubles to the Chinese economy. (Image: Xiao Lu Chu/Getty Images)

According to He Yafu, a scholar of family planning, the total amount of fines imposed on Chinese families from 1980 to 2012, for breaking the one-child policy was 1.5 trillion to 2 trillion yuan. All this money went to the Family Planning Commission and its officials.

But how could the Family Planning Commission falsify data in such a seamless manner?

The president of the Chinese Population Association is the director of the Family Planning Commission, and the deputy director of the National Bureau of Statistics in charge of the population census is usually the vice president of the Chinese Population Association. Both are under the leadership of the National Family Planning Commission, and both are in a good position to fix the data as they desire.

Of course, even without the Family Planning Commission, we have seen the Bureau of Statistics presenting obviously questionable data to the public, perhaps for political reasons. This would be no surprise, given the institutional and systemic culture of falsification in Communist China.

After decades of forcing the Chinese people to abort their children and restrict births, the Communist Party now urges them to get married earlier and have children earlier.

By Linda Chen. Lucy Crawford and Leo Timm contributed to this report.

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