China's Population Decline: Not "News"

Mike Smitka
Judge, Automotive News PACE supplier innovation awards
Steering Committee, GERPISA auto industry research network

Prof Emeritus of Economics, W&L

That China's population would start declining in the 1990s was a "done deal" a quarter century ago. By that point the One Child Family policy had extended the existing low fertility regime of China's cities into the much more populous countryside. The resulting smaller families meant that by 1998 the much smaller cohort of potential mothers under the One Child policy were themselves having few children. Meanwhile, urbanization meant that the number of families for whom a single child made sense was rapidly expanding, while a countryside where child labor was central to the well-being of families was fading. Between changes in target fertility for young mothers, and the cumulative impact of below-replacement fertility, future population decline was locked in place.

...that's China's population decline makes headlines is a surprise...

A bit more on the details. Maintaining a stable population requires that women average 2.1 surviving children, to ensure that there's at least one daughter to replace each mother. Since 1980, estimates of the "Total Fertility Rate" have remained well below 2.0 – even with the policy's many exemptions, families with 3 or more children remained a distinct exception. Hence a quarter century ago it was already clear that China's population would at some point begin to decline. Not only was the number of 15-19 year old women 6% lower than in 1980, the number of 0-4 year girls was 15% lower. By the mid-1990s the age of marriage had also risen, and teenaged mothers are now highly unusual. So by 1998, the mothers of the late 2010s had already been born, and were far fewer in number. Even if the timing of onset and rate of decline couldn't be pinned down without knowing how rapidly lifespans would increae (ditto subsequent fertility changes), the broad outline was there to be seen by anyone who understood basic demographics.

China's Population Structure, 1998
from PopulationPyramid.net

Of course we now know those details. Longevity did increase, and helped by very low child mortality, a girl born today can expect to live 80 years. Older Chinese are in no hurry to die! On the opposite end, however, fertility hasn't just remained low, it's fallen. As a result, the number of 0-4 year girls in 2022 is an estimated 40% below the number of young 20-24 year old women in 1991. Even if these girls go on to average 2.1 children – so far all evidence points to them not doing so – the number of mothers will fall through 2043. As the population pyramid shows, with today's girls the smallest cohort in decades, total population wouldn't start to stabilize for another 60 years, when that cohort of women starts to die off. Because China's population is so large, an option available to the US or the EU – accepting large numbers of immigrants – won't work. There simply won't be enough young people elsewhere in the world to fill the gap.

China's Population Structure, 2023
from PopulationPyramid.net

I've simplified the story. Not all women have children at age 20, and mortality rates vary with age and can predictably be expected to change as today's younger Chinese grow up with cleaner air and better drinking water, and are far less inclined to smoke. Of course they're also better fed and sedentary, which works in the opposite direction. Fertility rates will be different, even if the experience of Japan, Korea, and Southern Europe suggest they won't rise. Chinese exhibit a preference for sons, and by the late 1990s families engaged in selective abortions, so that the ratio of boys to girls rose 10 percentage points; the TFR thus needs to be 2.3 to guarantee that enough young girls will be born to replace their mothers. Aging likewise is uneven, tempered by the timing when larger cohorts reach their 70s. So demographers combine data on age-specific fertility and mortality to generate projections. Pandemics aside, those are pretty good over a 2-decade timespan. Thereafter the high-fertility, low-mortality case diverges from the low-fertility, high-mortality one. Still, the fact that every mother in 2043 has already been born provides a solid baseline.

That the likely population decline of 2022 makes headlines is thus a bit surprising. That the media coverage fails to focus on the consequent decline of the working age population, which is of the essence to future economic growth, is even more surprising. I know though from 3 decades in the classroom that the demographic momentum that comes from a population's age structure and birth/death rates is not intuitive. Even I, more numbers oriented that most humans, was once surprised by how much we know two decades in advance. It's also key to understanding retirement issues, and that too is not intuitive to a 20-something. As our societies age, though, it will come to dominate all of the middle- and high-income societies.

Addendum

That having a second child is viewed as challenging comes out in a January 24, 2023 New York Times article, "They Poured Their Savings Into Homes That Were Never Built" by Isabelle Qian and Agnes Chang. The article traces 4 individuals who took out mortgages to purchase apartments on which construction has ceased. Three indicate demographic implications: one a broken engagement and end of plans to have a child, and two who now "... can’t imagine trying to buy another home or having a second child," and a second who proclaimed that, due to the lost downpayment on a storefront property and continued mortgage payments, they are “... afraid to have another child. The income and expenses barely break even.” Nothing a government run by old men is going to do will enable such couples to have the three or more children necesary to reverse population decline.