China expected to report first population drop in five decades

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Chinese Flag.
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China is poised to report its first population decline in five decades after a once-in-a-decade census, the Financial Times newspaper said, citing sources familiar with the matter.

A population drop will add pressure on Beijing to roll out measures to encourage couples to have more children and avert an irreversible decline.

The National Bureau of Statistics (NBS), which is due to release the results of the census conducted late in 2020, did not immediately respond to a Reuters request for comment.

The population figure is very sensitive and will not be published until government departments have a consensus on the data and its implications, the Financial Times added on Tuesday, citing its sources.

“If China confirms such a decline, it would be a big deal,”   Zhiwei Zhang, the Shenzhen-based chief economist at Pinpoint Asset Management, said.

“The consensus expects China’s population to peak at 2027, based on the projection made by the UN. This would be much earlier than the market and policymakers expected.”

No explanation has been given for the delay in announcing the result, though the bureau said this month that more preparatory work was needed.

In recent months, China’s state media have been saying the population may start to shrink in the next few years.

In 2016, China scrapped a decades-long one-child policy in the hope of boosting the number of babies, replacing the measure with a two-child policy.

At the time, it also set a target to boost its population to about 1.42-billion by 2020, from 1.34-billion in 2010.

But the birth rate has continued to decline.

That is partly because urban couples, particularly those born after 1990, value their independence and careers more than raising a family, despite parental pressure to have children.

Rising living costs in major cities have also deterred couples.

“China would likely have to relax the birth control policy completely,” Zhang said.

Falling birth rates and a fast greying society will add pressure on the working-age population and hit productivity.

“Our projections using the pre-census figures already suggested that the workforce would be declining by 0.5% each year by 2030, with a similar impact on GDP,” Capital Economics wrote in a note on Wednesday.

“Slower growth would make catching the US economically harder. And there may be an intangible impact on China’s global standing too.”

While the pace of ageing is quickening in China, the US population is showing positive changes, the Chinese central bank said in a working paper published in March, citing UN predictions that the US population will increase by 15% in 2050 from 2019 while China's population would fall 2.2%.

China must recognise that its demographic situation has changed, the People’s Bank of China warned.

“Realise that education and technological progress cannot compensate for the decline in population,” it said.

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