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GrowingOldbeforeGrowingRich?
ChinesePopulation:BasicFactsTotalpopulation:1.37billionbytheendof2010Laborforce:0.78billionAgriculturallaborforceinagriculture:0.33billionRurallaborforce:0.48billionPopulationgrowthratedeclinedsubstantiallysince1970sPopulationgrowthratewasonly0.47%during2005-2010Developedcountries:0.41%Developingcountries:1.6%2023/1/112PopulationGrowthRate2023/1/113BasicFactsVerylowTFR(totalfertilityrate)HowmanychildrenawomangivesbirthtoinherlifetimeSustainableTFR:2.1UNestimation:TFR=1.64inChinaduring2005-2010Developedcountries:TFR=1.66Otherdevelopingcountries:TFR=3.03Japan:1.32;India:2.73;WestEurope:1.63;USA2.07Mostrecentdata:TFRinChinain2010census:1.182023/1/114InternationalComparisonofTFR2023/1/1156WorldwideTFR1.02.03.04.05.06.07.0ChinaRussiaUSAIndiaBrazilEuropeAfricaMiddleEastAustraliaCanadaMexicoJapanBasicFactsVeryhighpopulationdependencyratioThechilddependencyratioistheratioofthepopulationaged0-14tothepopulationaged15-64Theold-agedependencyratioistheratioofthepopulationaged65yearsorovertothepopulationaged15-642023/1/117PopulationDependencyRatioofChina2023/1/118InternationalComparisonofPopulationDependencyRatio2023/1/119Decliningchildrenpercentageoutoftotalpopulation2023/1/1110Socioeconomicimpactsofaging Decliningpopulationdependencyratioasaresultofone-childpolicy GDPpercapitagrowthrate=growthrateofGDPperworking-agepopulation+growthrateofworking-agepopulationHighersavingrateThisiscalled“demographicdividend”Nowasaresultofaging,demographicdividendisdisappearing2023/1/1111SocioeconomicimpactsofagingDecliningsavingrateInthelast30years,China’ssavingratewentupsignificantly.Thesavingratein2007wasabout51%,whiletheworldaveragewasjust19.7%.Especially,thehouseholdsavingratechangedfrom4.75%in1978to23.55%in2000andreachedapeakof33.75%in1994.IfChina’ssavingratehasasubstantialdecline,itwillgeneratebigshockstoThefinancialsystemandincreasefinancialriskThecapital-deepeninggrowthmodelpensionsystemandothersocialsecuritysystem2023/1/1112SocioeconomicimpactsofagingTheMissingGirlsandtheOrphansCauses:CulturaldesireforasonOne-childpolicyUltrasoundtechnologyResult:120.7males/100femalesinage0-4cohortin2006samplecensusSocioeconomicimpactsofagingHeavyfiscalburdenHugepensiondeficitsin14Chineseprovincesin2010Thetotaldeficitreached67.9billionin2010.Consideringtheagingpopulation,socialsecurityfundwillcauseheavierfiscalburdeninthefuture.PublicfiscalexpenditureTheexpenditureformedicalequipmentandwelfarefacilitiesforincreasingoldpopulationwillincreasesubstantially.2023/1/1114SocioeconomicimpactsofagingDeclininglaborsupplyTheratiooflaborforceintotalpopulationdecreasedin2011;theabsoluteamountoflaborforcedeclinedforthefirsttimein2012.IncreasinglaborcostChina’surbanaveragewageincreasedfrom10834yuanto36539yuan,growing12.4%everyyear.From2010,thelaborcostincreasedabout20%inYangtzeRiverDeltaandPearlRiverDelta,andChina’saverageminimumwagestandardincreasedabout12%.AcceleratingtheupgradingofChineseindustrialstructureLow-costmanufacturingaretransferredfromtheeastareatothemiddleandthewestarea.
In2005-2010,investmentstothemiddleandthewestareasincreasedfrom250%to1280%.2023/1/11152023/1/1116ServicesectorneedsrapidgrowthServiceindustryas%ofGDPinChinaversusUS2023/1/1117EducationandR&DremainsmallEducationandR&Dexpenditureas%ofGDP–Chinavs.USOneMainCauseofAging:OneChildPolicyInDecember1973,thegovernmentproposedfamilyplanningpolicy:“late,lessfrequent,andlessLatemarriage:male25yearsold;female23yearsoldLessfrequent:4yearsbetweentwochildrenLess:maximum2children,encouraging1childonlyIn1980,SongJian,amissilescientistcombinedthemethodsfrombothnaturalscienceandsocialscience,andpublishedareportonpopulationcontroltheory:China’spopulationwouldexceed1.4billionby2000;4billionby2050Asaresult,thegovernmentannounced:“encouragingonechildforonecouple”.In1982,thegovernmentannounced“one-childpolicy”a“fundamentalstatepolicy”2023/1/1118BackgroundofOne-ChildPolicyWorldwidepopulationexplosionafterWWIIChinesepopulationincreasedfrom0.54billionto0.99billionfrom1949to1980(Taiwanpopulationmorethandoubled)Worldpopulationincreasedfrom2.53billionto4.45billionfrom1950to1980PopulationincreasedfasterindevelopingcountriesOurplanetwillcollapse?!RomeClub:LimitstoGrowth2023/1/1119Theoreticalbackgroundofone-childpolicyMalthusianeconomictheory1798:"EssayonPopulation"ExplainsstagnationasresultingfromlimitedsupplyoflandandpopulationgrowthWhyaremanypoorcountriesnotgrowing?Whydidallcountriesstagnatebefore1800?IdeaofMalthusiantheoryWhenincomeinhigh,peoplehavemanychildrenandpopulationgrowthishighHighpopulationgrowthlowersincomeuntileachparenthasjustonechildIncreaseinzwillleadtohigherincomeandhigherpopulationgrowth;Higherpopulationgrowthpushesincomesdown2023/1/1120MalthusianModelLong-RunPredictionsIncomepercapitawillberoughlyconstantovertimeIncreaseinproductivitywillincreaseworldpopulationwithoutraisinglivingstandardsInventivecountriesandregionswillhavehigherpopulationgrowthTheMalthusmodelisanaccuratedescriptionoftheworlduntil1800AgricultureandlandwereimportantIncomeandfertilitywerepositivelyrelated2023/1/1121InternationalEvidenceonPopulationGrowthandIncomeperPersonLong-runRelationshipbetweenRealWageandPopulationClark2005,p1308Fig1WhytheMalthusiantheorydoesn’tfittoday’seconomy?AgriculturewasreplacedbyindustryLandisnolongerasimportantasbeforeMorecritically,fertilityrateisnotgrowingasincomegrowsProductivitygrowthisnotoffsetbypopulationgrowthIncomepercapitaincreaseswithproductivity2023/1/1124TheDemographicTransitionTheincome-fertilityrelationshipalsochangedInlate19thcentury,mortalityratesandfertilityratesfellsteeplyinEngland,U.S.,andGermanyTodayricherpeoplehavefewerchildrenAllindustrializedcountriesexperienceddemographictransitionWhyDidFertilityFall?Increasedcostofchildren(education,nomorechildlabor)LowmortalitySocialsecurityIncreasedfemalelabor-forceparticipation27WorldwideLifeExpectancy28DecliningTFRinManyCountriesYearUSAJapanKoreaIndiaSingapore29DecliningTFRinManyCountriesTheCurrentSituationinDevelopingCountriesManydevelopingcountriesarestillinbetweenMalthusandmoderneconomyAgricultureplaysamoreimportantroleLesseducation,lesssocialsecurity,lessfemalelaborforceparticipation,andmorechildlaborresultinhigherfertilityandpopulationgrowthChina’sPopulationinthefuture32PopulationProjectioninDifferentPoliciesStopthepolicyin1980Stopcontrollingbirthin2005Allowingsecondchildin2005Continuingpolicy33LaborforceunderdifferentpoliciesStoppolicyin1980Stoppolicyin2005Allowingsecondchildin2005ContinuingcurrentpolicyLaborforce:agedbetween18-6434AgingpopulationunderdifferentpoliciesPercentageofAgingpopulation
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