China population: urbanisation offers ‘huge’ source of untapped labour and consumption

Name: World population set to hit 8 billion, with India overtaking China as most-populous country
Uploaded: 2022-09-08T23:00:11.000Z
Duration: 2 min 23 s
Description: World population set to hit 8 billion, with India overtaking China as most-populous country

As China’s fertility rate falls and its population becomes increasingly older, dwindling consumption presents ‘a brand new challenge that China has never faced before’

With a middle class of about 400 million people, China is increasingly trying to tap into its domestic market to help drive economic growth

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Chinese mothers gave birth to 10.62 million babies in 2021, an 11.5 per cent fall from 2020. Photo: AFP

Mia Nurmamat

Published: 7:00am, 9 Sep 2022

The world’s most populous country – at least for now – is expected to see a decline in its population next year, according to a leading Chinese demographic economist who is calling on Beijing to support urbanisation as a means to boost China’s labour supply and increase the consumption pool.

Cai Fang, with the Chinese Academy of Social Sciences, said that the country’s fertility rate is already “infinitely close to zero” and poised to enter negative growth next year.

The demographic challenge, he added, has curbed the nation’s economic growth and consumption potential.

“[Dwindling consumption] is a brand new challenge that China has never faced before,” Cai said at an economic forum on Wednesday.

He said this was largely due to the elderly’s lack of willingness to spend, adding that sluggish consumption will be a major constraint on China’s economic growth as this group accounts for an increasingly large share of the total population.

People older than 60 account for more than a fifth of residents in 13 of China’s 31 provincial-level jurisdictions, and people aged over 65 represent 14.2 per cent of its total population, official figures show.

Chinese mothers gave birth to 10.62 million babies in 2021, an 11.5 per cent fall from 2020, and China’s census showed that its 2020 fertility rate was 1.3 children per woman – below the replacement level of 2.1 needed for a stable population.

According to an estimate from a team of demographers, including Liang Jianzhang, Ren Zeping and He Yafu, as China did not release an official figure last year, for China’s population of 1.4126 billion, the fertility rate in 2021 was 1.15, down from an official figure of 1.3 a year earlier.

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World population set to hit 8 billion, with India overtaking China as most-populous country