Monday, December 27, 2010

China's Demography: A Brewing Storm

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 asymmetrical at the top.  In this case, the asymmetry 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.


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.


  1. 2050 is 39 years from today.
    Japan, US and EU are in the midst of this already. policies and reality can change quickly...

    The problem is not that people are ageing the problem is we not letting them to die. Keeping them by any means necessary to be alive a bit longer....demented, disabled and cared for is unsustainable.
    If only the rich got it privately, that wouldn't be a problem. That would be actually a good measure to distribute wealth back to society.
    The investment we make on retired people is far more expensive than investing more in the young generation (who will pay the investment back).
    In 39 years EU and the US will be a retirement continent.
    Hard decisions have to be made! Maybe one day a technology will tackle this issue(im a Dr working on nano stuff) anyway when abundance of resources is present the need for expansion diminishes( a farmer who wants bigger yield stresses his plants before harvest)
    This is our situation. Yet, the abundance is very temporary.
    A new mind set is needed and different model to our political system. I am gutted to say it but it looks like the Chinese model is better equipped to deal with any of these issues rather than the idealist and post nationalist west.

    Im not writing this to provoke but if I have to be rational the populist decision (or actually indecision) in the current democratic model is paralysing policy makers to change things rapidly with bearing costs of possible war there is no time for pleasing everybody.. as in this crisis.
    The fact that western politician bluntly lie to the public about the economy is frightening. Honestly I dont blame them..The public is acting like a panicked dog in a lightning storm and the media is on their throats for changing their mind.... how sad can it get....well we do need a crisis. A real one. Painful and squeezing, our generation forgot money,food, health, education, and a house are not our privilege. Well I guess u cant really forget something that happened in the 30-40s....we will learn the hard way..sooner the better.

  2. I agree with you on so many fronts "anonymous" ...

    The crisis that we're currently experiencing is soft. No real solution will come unless certain extraordinary factors are addressed:

    1. the investment in retired people: while I do NOT believe that simply letting old people die in the woods alone is appropriate (many - though of an indeterminate number - of chinese families have done similar to their newborn daughters under the "one child" rule), I do believe that a return to an era of responsibility towards one's progenitors and progeny should be encouraged. IE: your mother wiped your ass when you were helpless, wipe hers when you're not - why pay for a care facility? It's probably cheaper to hire a home health aid if you've got it (and if she was born in The West before WW2, her house may already be completely paid for: Go live in it - she probably wants you to so you save some money). If you don't got it, the state will pay for it - if you do got it, you don't have time for this sh*t. Why are you thinking that way? Probably because people, as a whole, turned stupid.

    2. . . . and, on China's birth policy and the horrific aspects of the one child rule: isn't your wife a Chinese woman? Kill all the girls and who will give birth to your illustrious nation? Your girls should be held as a treasure. The Vikings thought women were a treasure or they wouldn't have invaded, killed every man and boy, and stolen away every woman who was, or would eventually be, of child bearing age. Helen of Troy was a treasure. We know the story. What happened to the world's perception of women? What happened is that, people, as a whole, turned stupid.

    3. A note to women in developing nations: you may no longer need your men to provide for you (and through science, you may not need men to fertilize eggs for you if you have the money to pay - two female sets of chromosomes in one egg CAN produce a viable female child), but you castrate a man and make him into a pseudo girl socially - and then chastize him for that (umm: mainly in america) . . . what happened? People turned stupid.

    4. Money, food, health, education, housing: not a privilege: Truly. We in the developed and developing worlds are stupid.

    5. "can't really forget something that happened in the 30-40's"? Oh yes we have. Because people are stupid. We also forget that recessions happen every 10-15 years bc we are stupid. It should never be new news. It's a recurring cycle. And China has very little to do with what we experience here in america. If we hadn't "done what we done" as my grandmother would say "we wouldn't be where we're at."

    Only stupid people have scapegoats. Smart people have goats they can eat. So, more power to the Chinese.

    How do you solve stupidity?

    In America you give them a REALLY BIG CRISIS. Not a soft one. And then you wait. For some reason our culture always responds feverishly, and to success, when it is completely against the wall. Like a bunch of stupid zombies. They mill about waiting until they smell blood - then they attack with a serious vengeance. And win.

    That hasn't happened yet. Because the people haven't attacked yet. The people haven't attacked yet, bc the crisis isn't big enough yet. The crisis isn't big enough. And we all know it.

    Or we're all just stupid and don't know when to act . . .

    Either way, I agree with you again:

    Solve Stupidity. This is not a very big crisis. Act soon (against the government - Obama, a nice guy who inherited a bit of a mess, is just a pawn here), or start practicing your Mandarin. Nothing wrong with any of that. Just the truth as I see it.

  3. to annonymous2, agree on few things....

    1. let old people die in the woods? I can see how my comment might have implied that but that wasnt my intention. Your right! people should look after their elders. What I was trying to say that the state cant take this role on itself. Its unsustainable.

    2.Chinease one child policy brought some insane side effect that they didnt foresee..a shame for them. Yet the current goverment is acting resposably (relativly) to change these things. They also strongly advance green projects without the need of green movements...just as an investment.

    3.??? i didnt understand what your on about. A man is not about fertilizing..a man has a role in society without fertilizing anything...same goes for women.

    5. we tend to forget crisis not because we are stupid. Because people have a built in assumption...the future will be similar to the present.

    Anyway no need for attacking anything!

    It will a painful anyother transition. But Americans and the west will come out on top....but only after a long long glitch.
    If you remember in the 80s everybody talked about Japan being the new superpower. Well their not. The american political system is still the best example of stability and prompts reform. but its in a serious crisis. They got addicted to lying to the people and Obama inherited a mess. But he did little to solve it.

    I find it very strange that amrica under obama lost the bulk of it allies. EU is not an ally,the relationship with israel are going from bad to worst. India missing bush. and saudia is not banking on the US anymore. In the east south Korea and Japan are holding on but they to seem to realize america is not something they should rely on. Look how little attention and support Obama gave to india when its propping pakistani army...this such a short term thinking. India and the US should be the best mates in the world.....sharing same global vision! They almost the same intrests in every global aspect. and if india will be the next superpower instead of china US will keep its position as world leader.
    Same with the health care bill, pass it, then modify it. short term thinking. He is a superb guy obama. I just think he is not equipped with good leaders skills. He is super clever guy that is not very good in doing the things he thinks of.

  4. There are positives about a declining youth % of population, which is rarely talked about.
    1 Most criminals are under 30 as they usually get better paying jobs with time and also do a better job of assessing the consequences of criminal activity as they age.
    2 The cost of educating schoolkids is removed.

  5. The people haven't attacked yet, bc the crisis isn't big enough yet. The crisis isn't big enough. And we all know it.

  6. how do you know they havent already started?

  7. Is it really true about pensions and health care in China? From what I know, they only have private insurances to rely on, so the burden is on the individuals, not the whole society (no solidarity, no social welfare).

    Lack of young, cheap work force is a problem to us, who like to have slaves. China will continue to manufacture goods, and more of the supply will go to them anyway (growing internal demand). Maybe it's time to revive our manfactures and accept the fact that one has to pay for work. Unemployed in our countries would approve.

    Plus, crazy man-woman ratio is also observed in India, and you definetely don't have there one-child-policy.

  8. Fantastic to see someone else tackling an issue that I have been passionate about for so long.

    Keep up the good work.

    Depopulation, and even aging population is an underrated and serious issue that has already effected many societies today. How China handles it will be very interesting.

    Anyways, feel free to check out my research paper on the issue back from Jan 2009. I wrote it for my graduate program after visiting China.

    Twitter: @BrianChannon

  9. Could you post the CURRENT demographic for China ?

  10. Have a look at Italy

  11. Thanks for the research. I don't see how it fits to the title though, as you are basically saying, China is just like any Western country now in terms of fertility, even higher than Japan still. This is good news, as the increasing scarcity of labour in China pushes Chinese wages upwards and gives the Chinese youth more job opportunities. Not to mention the slowing growth of demand. China is already the largest consumer of many raw materials, imagine without the one-child policy...
    Another great effect of the one-child policy is the accumulation of wealth within families: the combined wealth of for grandparents accumulates to one grandchild. This is one reason for the increasing wealth of the Chinese common people. Plus, by having only one child, Chinese parents put great emphasis on excellent education for their one hope.
    The ratio of men and women is actually not a problem of the one-child policy, but of the pre-communist culture of favoring men over women. A lot has improved, especially during the cultural revolution (as much pain as that period brought otherwise), but some sexism remains in the uneducated rural areas. It's defenitely better in China though, than in most other Asian countries. In the Philippines or Taiwan for example it's still very common for rich men to have several wives.

  12. The idea that China is simply a place of low wages has been outdated for some time. Even a decade ago, non-Chinese companies that had operated production facilities in China for some time were starting to complain to me that rising labour costs in China were starting to have an impact on their profit margins. Vietnam has become a popular alternative, although realistically it just isn't large enough to compensate.

    The research firm Global Demographics argues that China will lose over 30 million (yes, that's thirty million) people from its labour force between 2010 and 2020 as people age and leave the working population. Makes you think eh?

  13. What are the population pyrimids for the Middle East and what does that tell us?
    Good article. I'm Canadian and the Chinese are busy investing in/buying up our natural resources sector...much to our chagrin our government seems hell bent in letting it happen.

  14. Your comments on the 1970's pyramid are somewhat flawed. The pryamid does not demonstrate a 'typical population pyramid for an expanding population' but a population where the mortality rate is high and the health/wellbeing of the population is poor - see Mozambique's for example. In comparison, the more recent data from China we see a closer fit with Western democracies as health care etc have improved. The projections for 2050 are probably very worrying for the Chinese government however (mainly for economic reasons)


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