To realise Chinese modernisation, the country has to first address the new demographic challenges and achieve high-quality population development. — China Daily
THE development experiences of different countries at different times show that the relationship between population development and socioeconomic development can be mutually reinforcing and mutually constraining.
Since the launch of reform and opening-up in 1978, China has benefited from a favourable demographic structure characterised by an increasing workforce, declining dependency ratios and rising education levels of young workers, which contributed to China’s rapid economic growth.
However, population dividends cannot be permanent growth factors. Since traditional growth drivers weaken at higher development stages, economic growth is bound to decline.
Growth slowdown
The experiences of advanced economies prove this fact: economies transitioning from upper-middle-income to high-income status often experience growth slowdowns when their per capita gross domestic product (GDP) reaches about US$13,000.
From 2009 to 2019, upper-middle-income economies with late-stage population dividends saw, on average, 5.4% GDP growth, while high-income economies with post-population dividends averaged only 2.1%.
However, economies with appropriate policy responses can extend the population dividends and achieve smoother growth decline.
China’s demographic transition, characterised by people getting old before becoming rich, creates challenges and opportunities. Adapting to the new demographic normal while transforming development modes and fostering new growth drivers still offers China development opportunities.
By optimising and upgrading the industrial structure, intensifying urbanisation and vitalising rural areas, China can ensure long-term economic growth within a reasonable range.
Besides, to realise Chinese modernisation, the country has to first address the new demographic challenges and achieve high-quality population development.
Based on China’s modernisation goals and demographic challenges, the essence and significance of high-quality population development can be summarised as follows:
> Moderate fertility levels and stable population size
China’s total fertility rate has declined to about one, far below the world average of 2.3. If this low fertility rate persists or declines further, it will accelerate population decline and ageing.
Although a decline in the fertility rate is linked to socioeconomic development, China’s strict family planning policy in the past, too, contributed to the suppressed fertility levels.
So, improving basic public services and reducing the costs of childbirth, childcare and children’s education can help reverse the fertility rate to a more sustainable level.
> Optimised regional population distribution and dynamic balance
Regional population disparities reflect the difference in the development levels of different regions. Coastal areas, with low fertility rates but strong economic growth, attract more workforce, resulting in net population inflows.
Conversely, some central and western provinces with higher fertility growth rates but relatively low economic growth rates see the exodus of the workforce, while the northeastern region faces low birth rates and high labour outflows.
Reversing these trends, even slightly, requires coordinated economic and population policies.
> Modern human resources for technological advancement
Beyond the abundant workforce, favourable demographic conditions include continuous entry of better-educated young workers into the labour market and rising human capital.
Hurdles
The decline in population growth and rapid increase in the ageing population create hurdles for human capital accumulation due to slower improvement in labour quality, older workers with relatively low education levels struggling to adapt to the industrial and technological changes, and structural employment difficulties, complicated further by the rapid development of artificial intelligence technology.
Hence, improving both the quantity and quality of labour is crucial to achieving high-quality population development.
> Improving people’s living standards for common prosperity High-quality population development will promote Chinese modernisation by aligning the goals and means of modernisation. Maximising population and talent dividends is essential to ensure sustained economic growth.
Family-friendly society
Measures promoting a family-friendly society are conducive to improving basic public services, creating high-quality jobs, boosting human capital and fostering social mobility and individual development.
Moreover, adapting to new demographic trends requires a better understanding of the new economic situation and the need to take targeted policy measures.
> Enhancing fertility rates across life cycles
United Nation surveys show the desired fertility rate globally is the replacement level fertility of 2.1.
Favourable public policies can help raise the fertility rate above the current level in China, as most Chinese couples are reluctant to have two (let alone three) children because the more children they have, the more difficult it would become for them to balance career and family.
> Unlocking population and talent dividends While China’s working-age population may not increase in the near future, transferring surplus agricultural labourers and low-productivity non-agricultural labourers to other sectors can increase the supply of non-agricultural labourers.
Reforms such as relaxing the household registration restrictions in urban areas can facilitate workers’ mobility and resource reallocation, creating tangible reform dividends.
> Synchronising population quality and people’s living standards The alignment of high-quality population development and the improvement in people’s living standards are significant in terms of policy.
The Human Development Index (HDI), which covers per capita GDP, education and healthcare, aligns with high-quality population development. So, policies to improve the HDI can encourage some couples to have more than one child, as seen in welfare states such as Sweden.
When it comes to achieving Chinese modernisation, policies to help maintain moderate fertility rates can be integrated with the strategy to build a comprehensive social welfare system.
By adapting to the new demographic trends, China can better promote high-quality population development to achieve sustained economic growth and Chinese modernisation, ensuring long-term prosperity and shared development benefits. — China Daily/ANN
Cai Fang is a chief expert of the National High-End Think Tank, a division under the Chinese Academy of Social Sciences. The views expressed here are the writer’s own.
