Wakeup Call in Beijing, from Census Takers

Demographic shifts in China will challenge its economic growth, social stability and political rule, and set new imperatives for its model of economic growth and social governance in the coming decades.

On April 28, 2011, China’s State Council held a new conference to release the first round of results of its latest population census, conducted in November 2010. This latest census revealed a number of highly important facts, including several that were quite unexpected.

Among the most notable, China’s slowdown in population growth was fully confirmed. The low growth rate continues a long-term trend. During 2000-2010, China’s population grew at the rate of 0.57 percent annually. This is only about half of the level the prior decade and only one-fifth of the level in 1970, when China began to turn its attention to controlling population growth.

A New Chapter

Three decades ago, in 1980, China launched the most ambitious birth control program in human history, requiring each couple to have only one child. Thirty years later, that policy has become too successful. The census confirms that China’s fertility level (the number of children a couple is expected to have in their lifetime) now is among the lowest in the world, with a total fertility rate of only 1.4.  This number puts China below the average of the more developed world (1.7). Though still a country with a per capita income level about one fifth to one-sixth of the world’s other largest economies, China has a fertility level that is now far below that in the United States, the United Kingdom, and France (all around 2.0) and is on par with Italy, Germany, Japan, Russia, and Spain.

At the same time as the fertility is dropping, China’s population is continuing to migrate around the country. The census counted 221 million Chinese as migrants, defined as being away from their place of household registration for six months or more, and not counting those who are away but still living in the same city district. The size of the migrant population shot up by 83 percent from 2000, compared with the overall population growth during the same period of less than 6 percent.  This continued migration flow at an unprecedented scale has served as a fundamental driver for China’s recent economic boom.

Economic growth and migration combined also pushed China across another historical benchmark. The census reported 49.68 percent of China’s population as urban at the time of the census, which means by now half of all Chinese are urban.  The first decade of the twenty-first century, therefore, was also China’s fastest decade in terms of urbanization, with a 13.45 percent increase in the share of urban population. In a decade, China’s urban population expanded by over 200 million, forming the largest scale urbanization in human history.

Managing a Fast-Moving Society

A result that may surprise many is that migration and population resettlement are producing a phenomenon of  China’s “hollowing from the center.” Provinces such as Chongqing, Sichuan, Guizhou, Hubei, Anhui, and Gansu have lost people, whereas Guangdong in the Pearl River Delta and Zhejiang in the Lower Yangzi Delta have seen their population size growing by 21 and 16 percent respectively. Perhaps to the disappointment of some Chinese policymakers, the Great Western Development strategy in the last decade did not seem to help these poor provinces retain their laborers. To the contrary, China’s largest cities saw the fastest increase in population size: Tianjin by 29.3%, Shanghai 38%, and Beijing, despite serious government efforts to control its expansion, by 42% percent. As people follow resources and opportunities, it is not hard to figure out why Beijing grew so fast.

A fast moving and urbanizing China reflects the far-reaching economic and social transformations China has undergone in the last few decades. This new demographic profile also presents new challenges to the Chinese government. With one in six Chinese on the move and with the population more connected by the Internet than by residence, it is increasingly difficult for the government to control the population. At the same time, the need to establish a national social safety net is made more urgent and apparent. China has little time to establish and to improve a nationwide pension scheme, and a medical insurance program that does not discriminate segments of the population, and that is portable across regions.

A population aging process that is faster than previously believed also carries important economic, social, as well as political implications. Continued low fertility with accelerating aging — for a country where the overall economy has grown rapidly but measured at a per capita basis is still at a very low level — raise concerns not just for labor supply but also for the ability of the government and families to support a rapidly expanding elderly population. Currently over 40 percent of all mid-aged Chinese couples have only one child, and the ratio of workers to retirees aged 60 and above will drop from roughly 6 to 1 in 2000 to barely 2 to 1 by 2030. Challenges in delivering promised entitlements and services to the population due to aging, which simultaneously reduces the share of taxpayers and increases that of benefit recipients, will test the government’s ability to meet widespread popular expectations.

A Wakeup Call for Policymakers in Beijing

For too long, Chinese policymakers have buried their heads in the sand. Scholars have been calling for almost decade to abandon the outdated one-child policy, which both is costly to Chinese families and to the government as well and has little use in face of a fertility that has been below the replacement level (2.1 children per woman) for two decades.

Scholars and the public have also been calling for a faster removal of the hukou (household registration) system and revamping the fragmented social security and health care systems, as both as currently operating are increasingly incompatible with a mobile and rapidly urbanizing population. Such calls have typically been met with more caution than action, sometimes even with censorship and suppression. It is possible that top leaders have been provided with erroneous information coupled with misleading reasoning (that demography, not economic performance, is the source of unemployment, for instance) by their subordinates.  But slow reactions have cost much precious time already.

Leaders in Beijing must have had the chance to preview the census results released last week and may even be a bit taken back by these results. They were probably dismayed that the sex ratio at birth is now 118 boys to 100 girls, having actually edged up from ten years ago. But they should be even more concerned with the reality that time may have been running out in confronting China’s population aging. It is no coincidence that two days before the census release date the Politburo members gathered for a crash course in demography, identified as a collective study session held in Zhongnanhai. On the eve of the census news conference, Chinese President Hu Jintao went on national television to call for continued efforts to stabilize low fertility but at the same time to suggest unspecified improvements in birth control policy.  Such a move is quite timid when compared with China’s neighbor Russia, where Premier Putin just announced a $53 billion program to raise its birth rate by 2015. China could take a lesson from Russia, where repeated government efforts to raise birth date have produced little result.

A census release is normally hardly a newsworthy event, and census results do not typically bring surprises. But for the largest population in the world, the latest census has turned out to involve both. The nearly ten million Chinese who worked as census takers have delivered what should be considered a wakeup call to China’s leaders.