The View | Three reasons China’s shrinking population won’t slow the economy
- Population growth is almost irrelevant to economic growth for a developing country
- Besides, China has millions of rural workers, who can partially offset any potential labour shortage. It also has the option of raising the retirement age
China does indeed face a unique demographic problem: the country is getting old before it is rich. To put the issue in proper perspective, China’s per capita GDP is about 17 per cent of that in the United States but China’s population growth has slowed to levels that are lower than that of the US.
Does this demographic problem necessarily cause growth stagnation? Not at all.
First, population growth is almost irrelevant to economic growth for a developing country. A typical example is Sub-Saharan Africa, where there has been plenty of population growth, but little output expansion prior to 2000.
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China 2020 census records slowest population growth in decades
In a similar vein, for a large number of rapidly industrialising economies such as South Korea and Taiwan in the 1970s and 1980s, and China since the 1990s, economic growth has been sustained at a very high rate, even though population growth has plummeted.