Caixin
Jul 10, 2020 07:35 PM
DAILY CHART

Charts of the Day: China’s Falling Number of Newborns

About 107 million fewer people were born in China from 2000 to 2019 than in the preceding 20 years, a drop of nearly 25%, government data show, as the cost of raising children has grown.

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The situation poses a challenge for policymakers as the falling number of births has exacerbated China’s aging society problem, leaving a shrinking proportion of working-age people to shoulder a greater share of pensioners’ retirement costs and sapping the economy’s vitality.

The Chinese Academy of Social Sciences (CASS), a state-backed think tank, wrote in 2019 (link in Chinese) that the country’s chronic low fertility rate will lead to an aging society and a shrinking population, resulting in multiple socioeconomic challenges.

Births in China have been falling every decade since 1980. There were several years last decade in which the number grew annually after the central government began loosening its one-child policy, an initiative Beijing rolled out in 1980 for the vast majority of the country to limit a family to one child.

One of the primary causes of the falling number of births is the rising burden of childrearing, including the costs of housing, education and medical care, as well as the huge opportunity costs that having children poses to families, according to a 2019 report (link in Chinese) by private think tank the Evergrande Research Institute. “Giving birth is affordable; raising children is not,” the report’s authors said.

According to the report, the cost of education has risen markedly as there is a severe shortage of government-subsidized public kindergartens. In terms of medical expenses, health care spending of households grew about twentythreefold from 1995 to 2017, far outpacing growth in disposable income which increased roughly sevenfold during the period.

Meanwhile, women’s employment rights and interests remain insufficiently protected, and they may find it difficult to keep a balance between work and childbearing, the report said.

The cost of childrearing can also be exacerbated by one of the other problems posed by the falling number of births. As an increasing share of the population retires, the responsibility for covering their retirement costs falls on a shrinking working-age cohort. For the 180 million people in China who are the only child in their families —an estimate in the report — they will have to shoulder the burden of caring for two elderly people, along with their own children.

Faced with a falling number of births, China rolled out changes to its rigorous one-child policy over the last decade, including one that allowed all couples to have two children in 2016. That year, the number of births rebounded to nearly 17.9 million, the highest in the last two decades. Since then, the number has fallen every year, hitting 14.6 million last year, the lowest this century.

CASS has warned that China’s population will likely start shrinking in 2027 if the country’s total fertility rate remains at 1.6. According to the World Bank, the figure fell below that threshold from 1998 to 2001 before recovering, but has since stayed close, inching up to 1.69 in 2018.

COTD chart-2

CASS said there is an “urgent need” for research and policy plans to deal with the problem.

Contact editor Michael Bellart (michaelbellart@caixin.com)

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