Opinion | Yes, China’s workforce is shrinking – but it’s also much smarter and more productive than before

Name: China 2020 census records slowest population growth in decades
Uploaded: 2021-05-21T19:30:13.000Z
Duration: 10 min 42 s
Description: China 2020 census records slowest population growth in decades

In all, these better-educated and more productive workers will be more than enough to offset the negative impact of an ageing population and shrinking labour force

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Workers check rolls of sheet aluminium at a factory in Wuhan, in central Hubei province, on May 8. China’s 14th five-year plan emphasises the development of the manufacturing industry, which can help prompt more migrant workers to shift to higher productivity jobs in that sector. Photo: AFP

Qu Hongbin

Published: 3:30am, 22 May 2021Updated: 3:50am, 22 May 2021

There are growing concerns that China’s shrinking workforce will have a negative impact on the country’s long-term growth. However, these worries are overblown, as better-educated and more productive workers are replacing the retirees.

China’s latest census results have confirmed that the population is growing more slowly and ageing faster, while the size of the labour force is decreasing. But the survey also established that China’s stock of human capital has continued to grow – and is likely to continue to do so.

This means productivity will also increase further, as skills, experience and knowledge are more important factors for labour productivity than just the number of workers.

First, the overall educational level in China is improving. Over the past 10 years, the number of people with a bachelor’s degree and above has increased by over 70 per cent, and its proportion of the educated population has increased to 17 per cent.

Meanwhile, the proportion of those with junior high school or lower levels of education fell. We estimate that every two retirees with less than eight years of schooling will be replaced by 1.9 new graduates with at least 12 years of schooling.

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China 2020 census records slowest population growth in decades

In addition, four out of 10 of these new better-educated workers are high-achieving students in the specialised STEM fields of science, technology, engineering and mathematics. This means China’s increasingly specialised labour force will not only help boost longer-term growth in terms of productivity, but also support industrial upgrading and technological innovation in the coming years.