Nicole Chung Yuen-WingandPaul Yip

Opinion | Zero population growth need not spell end of China’s prosperity

Instead of trying to reverse demographic trends, mainland authorities should focus on how to prosper in an era of flat population growth

An ageing population affects economic sustainability, technological progress and public spending, so policies must be adjusted accordingly

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Two women push strollers past an elderly woman in Beijing on April 19. The growing number of elderly in China will create a far-reaching financial burden on local governments. Photo: AFP

Nicole Chung Yuen-WingandPaul Yip

Published: 6:30am, 21 Apr 2022

China’s population grew by just 0.34 per thousand head of population in 2021, one of the lowest rates in the past few decades. Further, population growth is likely to turn negative for 2022 and China will become a super-aged society by 2035.

Proposals are being discussed to boost marriage and child-bearing, including giving monthly subsidies to families with more than one child and providing free kindergarten care for the third child in every household. Providing support to alleviate families’ burden would help reduce costs and ease worries about bringing up children in mainland China.

However, it’s doubtful whether they would help increase the number of children. Such measures are good, but the impact on fertility would be limited based on overseas experience and our empirical studies. Small household sizes are becoming the norm in modern China.

Marriage figures from 2021 are the lowest in decades. Delaying marriage, remaining single and divorce are all on the rise, which is not conducive to having children.

Mainland authorities should focus on living and prospering in an environment of zero population growth, as high-income countries, including Japan, Denmark and Sweden, have done.

Flat population growth translates to fewer young people devoted to research and discoveries, thereby slowing technological progress. As a result, an era of secular stagnation could follow, risking recession and fewer investment opportunities. Zero population growth also results in a decline in labour participation rates, labour supply and productivity.

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