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Brooks Wilson's Economics Blog: China's Impending Population Bust

Tuesday, April 27, 2010

China's Impending Population Bust

I have been on something of a freedom kick over the last couple weeks.  Many articles in the news of public efforts to limit freedom in the name of some social good convinces me to keep writing.  For years, China has attempted to limit Chinese women to one birth through forced abortions, sterilizations and infanticide.  China is now facing a huge projected decline in population.  Alexa Olesen of the AP describes the magnitude of the problem in "Long-hated one-child rule may be eased in China."

A people shortage may seem unlikely in a country of 1.3 billion, the most in the world. The concern, though, is not with the overall number. Rather, as the population shrinks, which is projected to begin in about 15 years, China may find itself with the wrong mix of people: too few young workers to support an aging population.

It is a combination that could slow or, in a worst-case scenario, even reverse China's surging economic growth. The government and families will have to tap savings to care for the elderly, reducing funds for investment and driving up interest rates. At the same time, labor costs probably will rise as the work force shrinks and squeeze out some industries...


Family size has dropped dramatically since the 1970s, when the average Chinese woman had five to six children. Today, China's fertility rate is 1.5 children per woman. Most families have just one, but exceptions allow multiple children for ethnic minorities and a second one for rural families whose first baby is a girl.

If that fertility rate holds, China's population will peak at 1.4 billion in 2026 and then start shrinking, according to the U.S. Census Bureau. By the end of this century, China's population would be cut almost in half to 750 million, according to a model developed by Wang Feng, a demographer at the University of California, Irvine. That would still be two and a half times bigger than the U.S. today.

Wang says the government's focus on slowing population growth has dangerous side effects.

In just 10 years, the age 20-24 population is expected to be half of today's 124 million, a shift that could hurt China's economic competitiveness by driving up wages. Over the same period, the proportion of the population over 60 is expected to climb from 12 percent — or 167 million people — to 17 percent.
The one child policy has had a second unintended consequence.  Boys are more valued than girls so parents have aborted female fetuses. 
Another concern is a surplus of males. Sonograms became more widely available in the 1990s, and some parents who wanted a son aborted their baby if they learned it was a girl.

Though the practice is illegal, statistics make clear that it is widespread. The male-female ratio at birth was 119 males to 100 females in 2009, compared with a global average of 107 to 100.

Experts fear that, in the years to come, the gender imbalance will create a frustrated generation of men unable to find spouses. That in turn could fuel the trafficking of women and girls to be sold as brides.
Would the country's citizens be better off if the government had stayed out of Chinese bedrooms and allowing them the freedom to plan their own family size?  Almost certainly yes, but it certainly would have been a freer country.

8 comments:

  1. Kellie Duncan28/4/10 10:53 PM

    China is just screwed. Sounds like someone didn't think that plan out. This just proves that governments overstep boundaries and make matters worse by doing so.

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  2. Danielle Caserta5/5/10 6:10 PM

    China maybe very well in their technology and be very smart, but this is just dumb. They need to realize that kids are the future and you can not limit the future. Also the girl to guy ratio will be off and chaos, raping, and corruption will happen in China.

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  3. Jorey Burkett5/5/10 8:14 PM

    As most well-quoted economists know, the U.S. great economic growth natually hampered our populations rapid growth, slowing us down and into a comfortable rate. These dumb chinese people are going to hurt economical growth down the line because their will be an inadaquate amount of children to support the huge older pop. If they would have looked at us they could have stopped this insuing mistake. In their futile attempts to stand on a global stage next to The U.S. they have committed one of the oldest mistakes in the book. Never limit the population! what are they thinking? they could be killing the next Asian Einstein.

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  4. Kevin Hutchison5/5/10 8:15 PM

    Government control of population growth is clearly a terrible idea that has come back to bite them. China's over-controlling government must be limited or China will not be able to thrive as a nation.

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  5. Danielle Caserta5/5/10 8:17 PM

    Also i dont really like Chinese people cuz they always are doing these like stupid things and stuff you know? and i like dont get it and stuff :/

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  6. Kevin Hutchison5/5/10 8:19 PM

    Dani's comments make absolutely no sense

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  7. Andrea Garza5/5/10 10:14 PM

    I agree that this is a problem. I think that limiting how many children a family can have is wrong as well. Children are the future and limiting that will have a limiting effect on the Chinese economy. I agree that space is limited in China, but there must be other ways than limiting population to solve the problem.

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  8. I feel like as long as china is a socialist country with a limited birth rate and with out freedom of speech and other liberties it will never be able to realize its true economic growth, especially now with a recession close

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