China’s Aging Population: A Demographic Crisis

Thanks to an idea from a reader, I’ve done some research into the demographics of China.  The country’s one child policy of the 1980s has markedly impacted the population distribution of the country and will impact its economic future and, by extension, that of the world.
 
Before we look at China, I’d like to take a quick look at the use of population pyramids.  These graphic tools can be used to very quickly understand the age distribution of a country’s population and can be used to project that country’s population over time.  By convention, population pyramids show males on the left and females on the right.  The horizontal axis is the number of each gender (usually in millions) and the vertical axis is age categories, usually in five year increments.
 
Now let’s look at what population pyramids can tell us.  The first type we’ll look at is an expansive or expanding population pyramid.  A broad base tells us that there are more young people in the population  and a narrow top tells us that there are fewer older people.  The broader the base, the higher the birth rate and the narrower and lower the top, the higher the death rate.  As well, where the sides of the pyramid are concave, a high death rate is indicated and where the sides of the pyramid are convex, a low death rate is indicated.  A rapidly expanding population (very broad-based pyramid) is generally indicative of a lower standard of living where there is limited access to birth control and a very narrow top indicates that there is poor medical care and that nutritional deficiency might be an issue.  Note that in this type of pyramid there are more children than there are males and females in the ages where reproduction is most likely to take place meaning that the population is more than replacing itself over time.
 
Here’s an example of an expanding population pyramid showing the population of Japan in 1950:
 
 
Notice how there are fewer males and females as the population ages.  This type of pyramid is quite typical of many European nations, the United States, Canada and Australia after the Second World War and, as stated above, is an expanding population pyramid.
 
The second type of pyramid is the stable or stationary population pyramid.  The base of the population pyramid is the same width as the age range where reproduction is most likely to take place.  This is generally indicative of a higher standard of living where there is ready access to birth control.  The relatively wide and high top to the pyramid indicates that there is a low death rate due to good nutrition throughout life and access to good medical care.
 
Here’s an example of a stationary population pyramid for the country of Iceland in the year 2000:
 
The third type of pyramid is a contracting or contractive population pyramid.  These pyramids have a narrower base than the age range where reproduction is most likely to take place, in fact, these diagrams don’t really resemble a pyramid at all.  Notice how the population of the age groups between 0 and 14 years of age are much narrower than those of the reproductive age groups between 15 and 44 years of age.  In these cases, the population is not replacing itself; very low birthrates mean that the population is likely to drop in the future.  These population distributions are usually found in developed nations.  
 
Here’s an example of a contracting population pyramid for the country of Japan in the year 2000:
 
As time progresses, this population will shrink because Japan faces the three issues of having a very low birthrate, a long lifespan and a very low immigration rate.  Here is the population pyramid showing the projected population groups for Japan in the year 2050:
Notice how there are many more senior citizens (39.6 percent of the total population) than there are young children under the age of 15 (8.6 percent of the population).
 
Irregularities in the sides of a population pyramid can be indicative of various issues.  Bumps in the side can indicate sudden growth in the population.  As shown in this example of France, the circled bump accompanying the birth of baby boomers after World War II travels up the pyramid with time from the year 1970 to the year 1985:
As well, because population pyramids show the distribution of males versus females, one can see how the distribution of the two genders changes with age.  In the 2050 chart for Japan shown above, note that the pyramid is assymetrical at the top.  In this case, the assymetry results from the fact that there are many more females over 80 years of age than there are males.  This too seems to be typical of developed nations.  On the upside, senior men are pretty much going to have their pick of female partners!
 
On to China.  As you may recall, China instituted a one child policy in 1979.  This policy was brought about because of the massive population growth that China experienced during the 1960s and 1970s.  By 1963, the average Chinese woman had given birth to 7.5 children.  While that rate had dropped to 2.7 births per mother by 1979, there was still great concern about the future security of the nation’s food supply.  WIth 20 percent of the world’s population and only 7 percent of the world’s arable land, the government instituted a policy that would ensure that the country would be able to feed its own people.  Today, the policy is still in place and nearly two thirds of Chinese couples are required to have only one child; statistically there are around 150 million families with only one child.  China claims that their one child policy has averted roughly 400 million births although there is no real way to independently confirm that number.  China’s country-wide fertility rate is well below the replacement rate of 2.1 children per woman; it has decreased to an estimated 1.5 children per woman and in developed urban areas, it has dropped to an average of one child per woman.  To put this number into perspective, the country of Japan which is projected to have a massive drop in population over the next 40 years, has the world’s fifth lowest total fertility rate at 1.2 children per woman.  Macau (a special administrative region of China) has the world’s lowest fertility rate at 0.91 children per woman.
 
The one child policy has had unintended consequences; the sex ratio among children at birth has changed from 108 boys for every 100 girls in 1980 to 120 boys for every 100 girls today resulting in 20 to 30 million excess males.  As well, the single child families will have to rely on their sole child to provide for their parents as they age.  This will place a social and economic burden on the next generation as fewer of them will be required to fund the growing pension, health care and social welfare benefits of an increasingly aging population.  The number of elderly Chinese aged 65 and older stood at 144 million in 2007 and is expected to rise to 391 million by 2035 when seniors will comprise 25 percent of the total population.  The doubling of the number of people over the age of 65 will take only 27 years, much faster than the doubling of the number of seniors in the United States.
 
Here is what the population pyramid for China looked like in 1970 before the one child policy was adopted:
Notice the nice broad base and narrowing through the ages where reproduction is most likely to take place.  This is a typical population pyramid for an expanding population.
 
Here is what the population pyramid for China is projected to look like in 2050:
Notice the narrow base, the relatively wide top and the narrowing from ages 0 to 19 years.  This is a typical population pyramid for a contracting population.
 
Demographic changes have already been noted at the elementary school level; in 1995, there were 25.3 million new students enrolled in school.  By 2008, that number had dropped by one-third to 16.7 million.  The one child policy is also impacting China’s industries.  China is on the cusp of experiencing a decline in new entrants into its labour force.  The days of the seemingly endless supply of young and cheap Chinese labour is drawing to a close.  The number of young labourers between the ages of 20 and 29 has already dropped by 14 percent in the past 10 years and is expected to drop by an additional 17 percent in the next 20 years.  Not only will China’s demographic changes have a marked impact on China, it will have a marked impact on the world’s economy.  Most nations in the world have regarded China as the world’s manufacturer; should a shortage of labour occur, it will definitely impact the price of labour resulting in an impact on prices of goods around the world.
 
While the rest of the world will be adjusting to a changing demography as baby boomers reach their senior years over the next 2 decades, the impact on the world’s economy of that demographic change will be relatively minor compared to the massive impact felt when China’s massive population reaches the same point.

Click HERE to read more of Glen Asher’s columns.

 
References:
 
Brookings Institute:  China’s One Child Policy at 30 by Feng Wang
 
Brookings Institute:  China’s Population Destiny: The Looming Crisis by Feng Wang
 
Here is the link for a cool, little animated population pyramid for China from 1950 to 2050.
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