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The birth policy is about to undergo major adjustments. In October 2020, the Central Committee of the Communist Party of China (CPC) made it clear in the “14th five year plan” that “the national strategy of actively coping with population aging should be implemented. We should formulate a long-term population development strategy, optimize the fertility policy and enhance its inclusiveness. “

Li Jiheng, Minister of the Ministry of civil affairs, wrote an article in the relevant guidance books and pointed out that “we should optimize the fertility policy, promote the long-term balanced development of the population, and improve the quality of the population. This is a fundamental policy to actively respond to the aging population and maintain social vitality. “

The population problem is not only a family matter, but also a state affair. It is a basic, overall and strategic issue. Abe, the former Prime Minister of Japan, regards the reduction of children as a national disaster. Russian President Vladimir Putin said Russia’s fate and historical prospects depend on its population. Due to the long-term implementation of family planning, the problem of aging with few children has become one of the biggest grey rhinoceros in China in the 21st century. China is facing both the crisis of population peaking and shrinking rapidly in the long run, and the structural crisis of the aging population with fewer children.

In 2019, China’s birth population will drop to 14.65 million, and the population aged 65 and above will account for 12.6%. The total population will inevitably enter negative growth during the “14th five year plan” period. According to the current trend, the total fertility rate will decline from 1.5 in 2019 to about 1.0-1.2 in the future with the complete disappearance of the effect of the comprehensive two child policy, the improvement of education level and the promotion of urbanization. Based on the total fertility rate of 1.0, the total population will be 1.21 billion and 520 million respectively by 2050 and 2100, and the proportion of the elderly will be 31.2% and 53.4% respectively. Even if the total fertility rate is 1.4, the total population will be 1.27 billion and 730 million respectively by 2050 and 2100, and the proportion of the elderly will be 29.6% and 40.7% respectively.

If China wants to successfully realize the “Chinese dream” of national rejuvenation and stand in the world for a long time, we must correctly understand the internal law of population development and the relationship between population and economic and social development. We suggest that we should return the reproductive right to family autonomy as soon as possible, fully liberalize and encourage childbearing, so as to raise the total fertility rate to the level of generation replacement, and accelerate the construction of a system to actively respond to the aging population, so that everyone can rely on and have medical care for the elderly.

If the total fertility rate gradually rises to 1.8 in the next decade, the population of China will be 1.36 billion and 1.0 billion by 2050 and 2100, respectively, and the proportion of the elderly population will reach 28.9% and 32.5% respectively. If China’s total fertility rate gradually rises to about 2.1 in the next decade, the population of China will be 1.4 billion and 1.29 billion by 2050 and 2100, respectively, and the proportion of the elderly population will reach 26.8% and 26.7% respectively.

Considering that there is still a great controversy on the understanding of the population problem in all walks of life in the short term, it is suggested to gradually promote and observe the effect from the opening of the third child as soon as possible during the 14th Five Year Plan period, which is also in line with the traditional wisdom of China’s gradual reform and incremental reform. Before the “separate” two-child policy and the full liberalization of the second child, the fertility effect is not as expected, and is significantly lower than the predicted data of the anti liberalization faction.

China’s low birth and aging population is speeding up, and the peak population is approaching

China’s birth rate will continue to decline and will drop to less than 11 million by 2030.

After a 2 million drop in the number of Chinese births in 2018, the number of births in 2019 will drop by 580000 to 14650000. Since the founding of the people’s Republic of China, there have been three rounds of baby booms in China, which are 21 million in 1950-1958, 26.28 million in 1962-1975, and 22.46 million in 1981-1994. After that, it gradually dropped to 16 million in 2003-2012, including 16.35 million in 2012. China’s total fertility rate dropped from about 6 before the 1970s to about 2 in 1990, and then to about 1.5 after 2010. The fourth baby boom should have appeared after 2010, but it disappeared due to the long-term strict implementation of family planning. Under the above background, the one-child policy has finally been loosened. At the end of 2012, the central government decided to implement the policy of two children alone, but the effect was not as expected. The number of births from 2013 to 2015 were 1640, 16.87 and 16.55 million respectively. At the end of 2015, the central government decided to fully liberalize the second child policy, with the birth population reaching 17.86 million in 2016, the peak since 2000; however, it fell to 17.25 million in 2017, 2 million to 15.23 million in 2018, and 14.65 million in 2019.

The significant narrowing of the reduction rate of the birth population in 2019 is mainly due to the obvious narrowing of the reduction margin of the number of women of childbearing age and the basically stable fertility rate. The decrease in the number of one and two children is significantly narrowed than that in 2018. From the data of women of childbearing age, from 2016 to 2019, the number of women of childbearing age aged 15-49 decreased by 491, 398, 715 and 5.02 million respectively, of which the number of main women of childbearing age aged 20-35 who had more than 85% of children decreased by 194, 264, 398 and 3.31 million respectively. In 2018, the number of women of childbearing age decreased by 1.34 million more than that in 2017, and the number of women of childbearing age in 2019 was 670000 less than that in 2018. From the perspective of fertility level, according to our estimation, the total fertility in 2016 reached 1.7, which was significantly higher than that in 2015, slightly decreased in 2017, significantly decreased to about 1.5 in 2018, and basically unchanged in 2019.

From the perspective of international comparison, China’s current total fertility rate is not only lower than the global average of 2.47, but also lower than 1.67 of high-income economies. In terms of the number of births divided into children, the number of one child born in 2015-2019 is 879, 981, 713, 629 and 5.93 million, respectively; the number of two children is 658, 715, 892, 760 and 7.47 million (the data in 2019 is estimated), and the number of three children and above is 118, 90, 117, 134 and 1.25 million respectively (the data in 2019 is estimated). In 2016, the number of births increased by 1.31 million, mainly because the number of one child increased by 1.32 million, accounting for 78%, and the number of two children increased by 570000, only slightly higher than the increase of 530000 in 2015. In 2017, the comprehensive two child effect began to show obviously. Although the number of one child dropped by 2.68 million in that year, the number of two children increased by 1.77 million; in 2018, the number of births dropped by 2 million, mainly due to the following factors In 2019, the number of one child and one child decreased by 360000 and 130000 respectively, contributing 62% and 22% to the reduction of total birth population.

In terms of long-term trend, due to the gradual disappearance of fertility accumulation effect and the continuous decline of the size of women of childbearing age, the current birth population is still in a rapid decline period, which is expected to further reduce to less than 11 million in 2030. From 2015 to 2015, the proportion of children born twice increased from 2015 to 2015, accounting for 58.5% and 58.5% respectively. No one child has two or three children. After the accumulation effect disappears, the proportion of one child born will return to the normal level higher than that of two children. From 2016 to 2019, the number of one child births dropped by nearly 40%, to a historical low of less than 6 million, indicating a significant decline in the number of births.

According to the data of women of childbearing age, the number of women of childbearing age aged 20-35 reached a peak of 186 million in 1997, dropped to 167 million in 2006, then rose slightly to 173 million in 2013, and then continued to decline to 2031, pick up in 2032-2038, and continue to decline after 2039; among them, the size of women of childbearing age aged 20-35 years in 2030 will decrease by 28% compared with that in 2019, and that in 2050 will be reduced by about 20% compared with that in 2030 19%。 According to the current trend forecast, China’s birth population will continue to decline rapidly to less than 11 million in 2028, stabilize in 2029-2036, and continue to decline to about 8 million in 2050 after 2037.

The direct cost of housing, education and medical treatment, the burden of pension and opportunity cost are high, which can inhibit the fertility behavior and “can afford to be born but can not afford to support”. First, housing prices rose rapidly. From 2004 to 2018, the housing loan income ratio (residents’ mortgage balance / disposable income) increased from 16.2% to 47.6%, driving the residents’ debt to income ratio (residents’ debt balance / disposable income) from 28.6% to 88.4%. Second, the cost of education has risen significantly, especially the supply of public kindergartens is seriously insufficient. Families are forced to choose private kindergartens with higher costs. Some schools turn “homework into parents’ homework”, which makes it hard to educate their children. From 1997 to 2018, the proportion of students in public kindergartens in China dropped from 95% to 43%. Third, medical expenses continued to rise. From 1995 to 2018, residents’ medical and health care expenditure increased by 27 times, far exceeding the increase of 9.2 times of disposable income. Fourth, the “four two one” family structure of one-child couples has a heavy burden of providing for the aged and squeezing the fertility willingness. Fifth, women’s labor participation rate is high, but employment rights and interests protection is not enough, resulting in high opportunity cost of childbirth. From 1990 to 2019, the gap between Chinese women’s labor participation rate and men’s labor participation rate has expanded from 11.6 percentage points to 14.8 percentage points, while the gap of labor participation rate between men and women in the world, the United States, the European Union and Japan is narrowing.

China’s population aging is accelerating, and China will enter a deep aging society in 2022.

In 2019, China’s population aged 65 and above accounted for 12.6%, and the problem of getting old before getting rich was prominent. When the proportion of the elderly population in the United States, Japan and South Korea reached 12.6%, the per capita GDP of China was more than 24000 US dollars, while that of China was only 10000 US dollars. In 2019, China’s population aged 65 and above will reach 176.03 million, an increase of 9.45 million compared with that in 2018, accounting for 12.6% and 0.7% higher than that in 2018. Compared with the historical data, the aging degree of China’s population is accelerated; the average annual growth rate of China’s aging degree is 0.2 percentage points from 2001 to 2010, and about 0.4 percentage points from 2011 to 2018. From the international comparison of the aging level, China’s aging degree ranks 61st in the global economy in 2019, which is 2.2 percentage points higher than that of upper middle income economies. In 2019, 9.1% of the world’s population aged 65 and above, 18.0% in high-income economies and 10.4% in upper middle-income economies; Japan, Italy and Portugal account for 28.0%, 23.0% and 22.4% respectively. From the international comparison of aging degree and economic development level, the per capita GDP of the United States, Japan, South Korea and China reached US $10000 in 1978, 1981, 1994 and 2019, respectively. At that time, the proportion of the population aged 65 and above accounted for 11.2%, 9.2%, 5.8% and 12.6% respectively. The proportion of people aged 65 and above in the United States, Japan, South Korea and China reached 12.6% in 1990, 1992, 2015 and 2019 respectively. At that time, the per capita GDP was 24000, 30000, 27000 and 10000 US dollars respectively.

From the perspective of development trend, the speed and scale of China’s population aging are unprecedented. In 2022, China will enter a deep aging society, which will account for more than 14%. In 2033, it will enter a super aging society with a proportion of more than 20%. After that, it will continue to rise rapidly to about 35% in 2060. With the decline of fertility rate and the extension of life span, aging is a global phenomenon. However, due to the long-term implementation of family planning in China, the speed of aging is unprecedented. The proportion of aging population in France from 1972 to 2014 (more than 46% of the aging population in Germany from 1972-20 years old) accounted for more than 24% of the aging population in France (from 1972-20 years old), which accounted for more than 24% of the aging population in the developed countries 11 years (1995-2006). In 2001, more than 7% of China’s population aged 65 and above entered an aging society. It is estimated that China will enter a deep aging society in 2022, that is, in 21 years, and then enter a super aging society around 2033 in 11 years. After that, it will continue to rapidly rise to 29.5% in 2050 and 35.2% in 2060. After a period of stabilization, it will rise again to about 40% in 2084 and after that.

Moreover, due to the large population base, the size of China’s elderly population is unprecedented. In 2019, China’s population aged 65 and above has reached 176 million, which is expected to reach 376 million by 2050 and reach a peak of 414 million in 2058. By then, there will be approximately one elderly person over 65 in every three Chinese population. Moreover, the aging problem will become increasingly prominent. In 2019, there are more than 32 million elderly people aged 80 and above in China, accounting for 2.3%. It is estimated that the number of elderly people will reach 53 million in 2030, accounting for 3.8%; 130 million elderly people in 2050, accounting for 10.3%; 174 million in 2073, accounting for 17.1%; 156 million in 2100, accounting for 20.8%.

In addition, in terms of the median age of the population, the median age of China’s population rose from 21.9 years old to 36.5 years old from 1980 to 2015, and is expected to rise to 43.0 and 50.7 years old respectively in 2030 and 2050. Internationally, the median age of the population in the United States, Europe, Japan and India will be 37.6, 41.4, 46.4 and 26.8 years in 2015, and will be 42.7, 47.1, 54.7 and 38.1 years in 2050. By 2050, the median age of China’s population will be significantly higher than that of the United States, Europe and India, restricting international competitiveness.

The aging of the population makes the contradiction between social security income and expenditure increasingly prominent, and the pension gap will increase day by day. In 2018, the balance of social insurance fund revenue and expenditure was 1162.2 billion yuan, and the actual surplus after excluding financial subsidies was – 603.3 billion yuan, which was negative for six consecutive years. Pension insurance accounts for 70% of the social security system. In 2018, the actual surplus of endowment insurance fund was – 4504 billion yuan, and the actual surplus was also negative for six consecutive years. At present, the social security gap is mainly due to historical arrears, that is, in the era of planned economy, some people do not pay insurance premium before retirement, but enjoy pension benefits. In November 2017, the State Council issued the implementation plan for transferring part of the state-owned capital to enrich the social security fund, requiring that 10% of the state-owned equity of enterprises be transferred before the end of 2020 to supplement social security. However, with the deepening of the aging population, the pension gap will become increasingly prominent, which is also a common global problem. From the perspective of China’s basic endowment insurance fund for urban employees, the payable time of China’s accumulated balance gradually decreased from 18.5 months in 2012 to 13.7 months in 2018, and the dependency ratio (number of employees / retirees) dropped to 2.55. In 2018, 4 provinces were unable to make ends meet, the accumulated balance of 18 provinces could be paid for less than 12 months, and the dependency ratio of 8 provinces had dropped to less than 2; among them, Heilongjiang endowment insurance fund continued to “make ends meet” since 2013, and the accumulated balance turned negative in 2016. Moreover, with the aging, the pressure of medical expenditure will be increasing. According to the national health service survey, the two-week prevalence rate (number of patients / number of people surveyed) increased from 14.3% to 24.1% from 2003 to 2013; among them, the prevalence rate of people aged 65 and above increased from 33.8% to 62.2%, and the prevalence rate of the elderly population in 2013 was 2.58 times of the average level.

China’s population has exceeded 1.4 billion, but will soon fall into negative growth.

China’s population will exceed 1.4 billion in 2019, and the 1.42 billion expected in the national population development plan (2016-2030) will not be realized in 2020. In 2019, China’s total population was 1400.05 million, breaking through 1.4 billion for the first time, an increase of 4.67 million compared with that in 2018. The population growth continued to narrow, and the natural growth gradually slowed down. China’s population (excluding Hong Kong, Macao, Taiwan and overseas Chinese) was 540 million in 1949, 1 billion in 1981 and 1.4 billion in 2019. It took 12 years for China’s population to grow from 800 million to 1 billion, 14 years from 1 billion to 1.2 billion, and 24 years from 1.2 billion to 1.4 billion. The 2016 national population development plan (2016-2030) estimates that China’s population will be 1.42 billion in 2020. To achieve this goal, China’s population will increase by about 20 million in 2020, which is obviously impossible. The reason for the wrong estimation in the national population development plan (2016-2030) is that it overestimates the impact of the comprehensive two child policy on the increase of fertility rate. It is believed that the total fertility rate in 2015 is between 1.5 and 1.6, and the total fertility rate is expected to be 1.8 in 2020 and 2030 respectively. It is predicted that China’s population will reach a peak of 1.45 billion around 2030.

The United Nations also overestimates China’s population growth, and the medium program predicts that it will reach a peak of 1.46 billion in 2031. The United Nations World Population Outlook (2019) has nine prediction plans for China’s population. The medium program assumes that China’s total fertility rate will be 170, 1.72 and 1.73 in 2015-2020, 2020-2025 and 2025-2030, respectively, and then predicts that China’s population will usher in a peak of 1.46 billion in 2031. In addition, the low scenario assumes that China’s total fertility rate will be 145, 1.32 and 1.23 in 2015-2020, 2020-2025 and 2025-2030, respectively, and the population will reach a peak of 1.45 billion in 2024.

We predict that China’s population will fall into negative growth during the 14th Five Year Plan period. The total population of China will shrink sharply from 2050. The population of China will drop to less than 800 million by 2100. By then, the proportion of China’s population in the world will drop from about 19% to 7%. Compared with the generation replacement level of 2.1, Japan’s 1.4 total fertility rate roughly means that Japan’s birth population will shrink by about 1 / 3 every other generation, while Korea’s 0.98 total fertility rate means that Korea’s birth population will decrease by more than 50% every other generation.

Although China’s total fertility rate is 1.5 in 2019, the fertility rate will decline further as the accumulation effect of fertility disappears. Even if the total fertility rate of 1.4 is estimated, China’s population will reach the peak around 2022; if the total fertility rate is 1.3 or 1.5, the Chinese population will reach the peak in 2021 and 2024. In the first 25-30 years after the population peaked, the rate of shrinking was slower, but it would be faster when the birth population of high fertility period entered the end of life from 1962 to 1975. China’s population will decrease by only 9% in 2050 compared with that in 2022, 22% in 2075 and 25% in 2100, that is, about 750 million in 2100. In 1950, China’s population accounted for 22% of the world’s population, which dropped slightly to about 19% in 2019, and to about 7% in 2100. With the total population shrinking, China’s market advantage will gradually lose, and its comprehensive national strength will also be affected.

The demographic dividend disappeared and the potential growth rate of China’s economy declined.

From the perspective of economic growth, the proportion of working age population has peaked in 2010, and it is estimated that 2050 will decrease by 23% compared with that in 2019; from 2010 to 2018, China’s economic growth rate has dropped from 10.6% to 6.1%, which is about to enter the “five times”. The demographic dividend was an important factor for China’s rapid economic growth in the past. After the reform and opening up in 1978, China has rapidly grown into the second largest economy in the world relying on its huge and young labor resources and the huge unified market related to it. During 1962-1975, the second round of baby boomers was the main force of construction in the 40 years of reform and opening up. With more production and savings and less consumption, the savings rate and investment rate increased. The part of savings exceeding investment generated a trade surplus. At the same time, the excess liquidity and per capita income level promoted consumption upgrading, and the potential economic growth rate was higher.

However, under the background of long-term low fertility rate, the proportion and scale of China’s 15-64-year-old working age population peaked in 2010 and 2013 respectively, and the demographic dividend disappeared, leading to a downward trend in China’s potential economic growth and promoting the shift of China’s economic growth. From 2010 to 2019, China’s economic growth rate will gradually drop from 10.6% to 6.1%, which is about to enter the “five times”. From the absolute level, the total dependency ratio of China’s population is about 40%, and it will still be in the “window of population opportunity” (less than 50%) with relatively light population burden for some time to come. According to the 2010 census data of China, the population of the post-80s, 90s and 00s are 219 million, 188 million and 147 million respectively, about 31 million less than that of the post-80s, and 41 million less than that of the post-90s. It is estimated that 2050 will decrease by 230 million to 760 million, or about 23%, compared with that in 2019. As the total labor supply continues to shrink and labor costs rise, some manufacturing industries have begun and will continue to migrate to Southeast Asia, India and other places.

From the perspective of consumption, aging will increase the proportion of consumption, but reduce the growth rate of consumption, and lead to changes in consumption structure. For example, the proportion of health care will gradually increase. According to the life cycle consumption theory, the average consumption tendency of the elderly is high, and the aging will increase the consumption proportion but reduce the consumption growth rate. The proportion of China’s residents’ consumption in GDP reached its valley value in 2010. From 2010 to 2018, the proportion of residents’ consumption increased from 35.6% to 39.0%, and the growth rate of residents’ consumption expenditure decreased from 15.3% to 9.5%. In addition, there are differences in consumption preferences among different generations, such as the preference of the post-80s to mothers and infants and cars, the preference of the post-60s and the Post-70s to alcohol, and the pre-60S to health care, etc.

For example, the 25-54-year-old population peaked in 2017, and the growth rate of tobacco and alcohol sales will slow down; the 20-50-year-old main home buyers peaked in 2013, and the newly started residential area reached a double peak of about 1.4 billion Ping in 2011 and 2013; the total consumption growth rate of household appliances, furniture, architectural decoration and other real estate related industries peaked in 2010; the proportion of 25-45-year-old main car buyers peaked in 2003, and the growth rate of automobile sales dropped in fluctuation, 20 The first negative growth occurred in 18 years, but the potential of new energy vehicles is huge; the proportion of health care consumption promoted by aging increased from 6.2% to 7.8% from 2013 to 2018.

Wrong understanding of the three major Chinese population

For a long time, the debate on China’s population has never stopped. The focus has been on three aspects: how large is the appropriate population in China? Compared with the quality of population, the quantity of population is not so important? Should fertility be encouraged immediately?

What is the appropriate size of China’s population?

“Moderate population theory” is the theoretical cornerstone of family planning policy. At present, many people support this view, which is the source of all population disputes. On the contrary: Hu Baosheng, Song Jian, Tian Xueyuan and other scholars estimated in the early 1980s that China’s moderate population will be about 700 million in a century; if the population is not controlled, China’s population may reach 4.3 billion in 2080, thus demonstrating the rationality and necessity of the one-child policy.

We believe that, first of all, the concept of “moderate population” is only an abstract concept, which requires many long-term assumptions and is difficult to measure from the historical perspective. Alfred soway, a French demographer, once said bluntly that “the demographers can use the moderate population as a transitional tool, just as mathematicians use imaginary numbers.”. The research of Song Jian, Tian Xueyuan and others simply extrapolated the future based on the situation at that time or in developed countries, but did not predict the long-term changes. If we changed the hypothesis slightly, the conclusion would be quite different.

For example, when Song Jian (1980) predicted the change of China’s population size in the past 100 years, he directly extrapolated the total fertility rate at that time to the future, and ignored the law that the total fertility rate would decrease with the economic and social development. Only then did he conclude that if the population was not controlled, China’s population might reach 4.3 billion. In fact, after 2000, the total fertility rate had basically dropped below 1.6.

Tian Xueyuan (1981) believed that the degree of industrial technology and equipment = industrial fixed assets / industrial labor number. Referring to the situation of developed countries, he assumed that the annual average growth rate of industrial fixed assets was 5.5% – 6%, and that of industrial workers’ technical equipment was 4% – 5%. Therefore, in order to reach the level of industrial technology and equipment in developed countries, the maximum number of industrial workers in China in 2080 could only be 0.6% Then, the largest scale of agricultural and service workers is estimated through the proportion, and the conclusion that the moderate population of China in 2080 is 650-700 million. However, if the annual growth rate of fixed assets is increased by 1%, China’s moderate population will be far greater than 700 million in 2080. In fact, the average annual growth rate of fixed asset investment in China’s secondary industry from 1992 to 2018 was 19.6%, far higher than Tian Xueyuan’s assumption in 1981.

Secondly, with the development of technology, there is no static and absolute moderate population. In 1948, the British scholar fogert proposed that the maximum carrying capacity of land and natural resources was 2.2 billion people, which would face extinction if it exceeded human beings Ehrlich proposed in the “population explosion” that the world population at that time was about 3.5 billion, which exceeded the carrying capacity of the earth’s ecological environment, and predicted that uncontrollable famine and turmoil would break out in the 1970s and 1980s.

At present, the global population is close to 7.6 billion, and the overall order, resource depletion and environmental collapse have not occurred. With the development of technology, the carrying capacity of resources and environment to population has been significantly improved. For example, with the continuous exploration of crude oil and natural gas, the global crude oil reserve production ratio (remaining reserves / current year production) increased from about 30 years to 50.2 years from 1980 to 2017, and the natural gas reserve production ratio fluctuated from 49.9 years to 53.6 years. Through the development and utilization of renewable energy such as solar energy, water energy and wind energy, people have changed “non resources” into resources. According to world bank data, from 1960 to 2015, the proportion of global fossil fuel consumption decreased from 94.1% to 79.7%, and the proportion of nuclear energy and alternative energy consumption increased from 2.7% to 13.4%. Israel has only 4% of China’s fresh water per capita, but it relies on desalination and other technologies to alleviate the problem of water shortage.

Improving the quality of the population is the key, and the number of population is not so important?

In the current society, the importance of human capital is becoming more and more prominent, and artificial intelligence will replace a large number of human resources. Is the population still so important?

With 300 million people, the United States is stronger than 1.4 billion people in China. Can China become a big country with fewer people?

The opposite view 1: the national strength is mainly determined by the quality of the population, not the number of the population. Li Xiaoping, Cheng Enfu and other scholars believe that the number of people is smaller, and the per capita GDP is higher.

We believe that, first, the quantity and quality of the population jointly affect national strength. In short, national strength = population quantity * population quality * others. On the one hand, large population is a country’s advantage rather than disadvantage. From 1978 to 2018, the proportion of China’s GDP to the United States rose from 6% to 63%. According to the current development trend, China’s total economic volume will surpass that of the United States around 2028. If there are only 300-700 million people in China, the gap between China and the United States will be far greater than the reality, and the road of national rejuvenation will be even more remote. On the other hand, a large number of cities will shrink or even die out, and a large number of industries will wither or even disappear, which will seriously damage the national strength. For example, from 1960 to 2015, the population of Xizhang City, the “coal capital” of Japan, shrank from 108000 to 8843, and the elderly over 65 years old rose from 9.1% to 48.6% from 1980 to 2015. In 2006, it went bankrupt. Under the current trend, China’s population will shrink from 1.4 billion to 750 million in 2019-2100, and its global proportion will drop from 19% to 7%. The United States has long encouraged childbirth and introduced high-quality immigrants. Especially during the two world wars, the stable environment attracted a large number of population and talents. From 1900 to 2018, the population of the United States continued to rise from 76.21 million to 330 million, and the United Nations estimated that it would reach 430 million in 2100, which played an important role in the formation and consolidation of the United States as a great power.

Second, the population is not only a consumer, but also a producer. With a large population, it forms a large market on the demand side, and provides sufficient labor force and more talents at the supply side. The view of less population and higher per capita GDP only focuses on the consumption of population on economy and ignores the creation of economy by population. For per capita GDP, population is not only the denominator, but also the numerator, and its effect is more basic and long-term. There is no historical experience to prove that the total population is negatively correlated with per capita GDP. In reality, no country or region can achieve rapid economic development by reducing population. On the contrary, almost all developed countries, including Japan and European countries, are encouraging fertility and trying to maintain population growth. Japanese Prime Minister Abe, faced with the birth rate falling below 900000 for the first time in 2019, said that “the situation is very serious, and it is not too much to say that it is a national disaster”, hoping to promote the total fertility rate to rise from 1.4 to 1.8 as soon as possible. At the beginning of 2020, Russian President Vladimir Putin delivered a state of the Union address to the Federal Assembly, saying that Russia’s destiny and historical prospects depend on the population. The total fertility rate of 1.5 is too low, and it should ensure the growth of birth rate before the middle of the next decade. Russia needs to establish a clear, wide-ranging and systematic family support program, and from 2020, one-child families can also obtain “mother’s fund” ”。

From the demand side, the profit space of the big market makes the enterprises form greater R & D investment; there are more enterprises in the big market, which can refine the division of labor and improve the production efficiency, and the enterprise competition is more intense and the innovation power is stronger. A large population is conducive to promoting innovation. In a large market, small demand can form a market, and small technological innovation can survive. People always think that more people lead to subway congestion, but in fact, cities with fewer people may not even build subway. Because of its large population, by the end of 2019, China’s high-speed rail mileage has reached 35000 km, ranking first in the world. At the same time, China is also the third region after the United States and Europe to develop its own large civil aircraft. At present, only the United States, Europe and China have enough market to meet the scale required by the large aircraft industry in the world. Due to the huge consumer market, the development of Internet economy in China has attracted much attention. The sub industries such as e-commerce, mobile payment, sharing economy and artificial intelligence are developing rapidly. According to the data of CB insight, by the end of 2018, the number and valuation of Unicorn enterprises in China accounted for 38% and 42% of the world respectively. From 2013 to 2018, the number of new Unicorn enterprises in China increased from 1 to 32, and that of the United States increased from 15 to 53. The gap between China and the United States is rapidly narrowing.

From the supply side, the population is the foundation of talents. Only with a large population can more talents and innovation ability be stronger. China’s population with college degree or above is close to 200 million, ranking first in the world. A large population means a huge talent pool. From 1982 to 2015, the population size of China’s junior college or above rose from 6.04 million to 171 million, accounting for 12.4% of the total population from 0.6%. China’s talent pool ranks first in the world. According to the data of the world bank, China’s gross enrollment rate of Higher Education (the proportion of people receiving higher education in the corresponding age population) rose from 12.9% to 50.6% from 1970 to 2018, and from 47.3% to 88.2% in the United States from 1971 to 2017, and the gap gradually narrowed. From 2001 to 2018, the number of college graduates in China increased from 1.04 million to 7.53 million, an increase of about 627%. High quality talents have become the mainstay of all walks of life in China. Thanks to a large and highly educated team of engineers, China has gradually achieved the leading position in some fields.

With the coming of the age, do we need artificial intelligence?

Counter argument 2: artificial intelligence will replace many people’s jobs, and a large number of people will become a burden.

We believe that artificial intelligence will not only replace some traditional industries, but also generate more employment demand in new economy and new industries. In history, every scientific and technological progress has led to the reduction of labor consumption per unit output of traditional industries, but it has not reduced the total employment. The core is to create more and more jobs at the same time. For example, the emergence of automobiles has led to the unemployment of coachmen, but it has created jobs such as bus and truck driving, automobile R & D, manufacturing, repair and so on. The number of employees in the automobile industry is far more than that in the previous carriage industry. Historical experience shows that with the increase of agricultural productivity, the agricultural labor force has been decreasing, and “unemployed” farmers have entered factories to engage in manufacturing; with the continuous improvement of industrial productivity, the number of workers has decreased, and the “unemployed” workers have entered the service industry. From 1989 to 2018, the number of manufacturing employment in the United States decreased from 18.06 million to 12.81 million, a decrease of 29%. However, the number of employment in the service industry increased from 18.83 million to 129.31 million, an increase of 587%. The total employment did not drop but increased.

Artificial intelligence may replace 26% of the jobs in the next 20 years, but it may also increase by 38%. According to the “net impact of artificial intelligence and related technologies on China’s employment” released by PricewaterhouseCoopers in 2018, it is predicted that in the next 20 years, artificial intelligence will create 12% of China’s net jobs, equivalent to an increase of about 90 million jobs. Among them, artificial intelligence will replace 26% of the jobs, especially 36% and 27% of the jobs in the industrial and agricultural fields respectively. At the same time, artificial intelligence will create 38% jobs, especially 50% and 48% jobs in the service industry and construction industry. Artificial intelligence not only has a substitution effect on employment, but also has an income effect, that is, artificial intelligence can save more costs, lead to lower product prices, higher actual income of consumers, and promote consumption, thus promoting the company to expand production, employ more labor and create more jobs. Moreover, artificial intelligence cannot replace the consumption function of human beings, and the shrinking demand caused by population reduction will drag down the economic development.

Should fertility be encouraged immediately?

In recent years, there has been a heated discussion on whether to fully liberalize childbearing. The Fourth Plenary Session of the 19th Central Committee of the CPC proposed “optimizing the fertility policy and improving the quality of the population”. Although it has been improved, it is still limited to the framework of “comprehensive two child”.

Will full liberalization lead to “more poverty, more life”?

The opposite view 1: full liberalization of childbearing will result in more births for the rich and poor classes and less for the middle class, which is not conducive to social equity; and the population quality will decline due to the rural born population or explosive growth. We believe that childbearing is everyone’s basic right and should return to family autonomy; full liberalization is fair and respect for all families without discrimination; the current rural fertility rate is still low, and the rural birth population is not equal to the low-quality population. Compared with the previous conditional and differentiated Fertility Policies for different ethnic groups and urban and rural areas, it is more fair to fully liberalize childbearing. In 2015, the uncorrected total fertility rates of the whole country, urban areas and rural areas were 1.05, 0.91 and 1.27 respectively. The rural fertility rate was only slightly higher than that of urban areas, but the average fertility rate of rural women of childbearing age was less than 1.3 children.

Should fertility policy be adjusted cautiously or speedily?

Second, policy adjustment should be cautious. We can encourage two-child-bearing more vigorously or liberalize the birth of three or four children conditionally. We believe that the birth policy has been artificially delayed for too long and should not be delayed any more. We should immediately and comprehensively liberalize and encourage fertility. It is because the current population situation is urgent and it is in the birth window period of the middle and late third wave baby boom. The later the adjustment is, the better the result will be.

In 1980, the one-child policy was originally planned to be implemented for 30 years. However, Zhai Zhenwu and others estimated that the “comprehensive two child” policy would lead to a peak birth population of 49.95 million and a peak fertility rate of 4.5, repeatedly delaying the timing of policy adjustment. In the fierce discussion on population policy in the early 21st century, conservatives have the upper hand, and the adjustment of fertility policy has been repeatedly delayed. Song Jian et al. (2007) believed that the total fertility rate had been stable at about 1.8 since 1990, and suggested that the fertility policy should be kept stable during the 11th Five Year Plan period. Later, the central government issued a document requiring “every possible means to stabilize the low fertility level”. Zhai Zhenwu (2014) estimated that if the “comprehensive two child” policy was released immediately in 2012, the peak value of the total fertility rate would reach 4.5, and the peak birth population would reach 49.95 million, suggesting that the “comprehensive two child” policy should be postponed. Zhai Zhenwu (2015) estimated that the “single second child” will add 1.3-1.6 million new births each year in the next 4-5 years, with a total of about 6.6 million new births. In November 2013, the central government decided to implement the “single second child” policy, but the number of births in 2014 was only 470000 more than that in 2013, and even 320000 in 2015 compared with 2014. Zhai Zhenwu (2016) also estimated that the “comprehensive two child” policy will increase the number of new births by 1.6-4.7 million each year in the next five years. In December 2015, the central government implemented the “comprehensive two child” policy, but the number of births in 2016 was only 1.31 million more than that in 2015, 630000 in 2017 compared with 2016, and even 2 million in 2018 compared with 2017. Although Zhai Zhenwu’s forecast was significantly lower than before, it was still far higher than the actual level. The Conservatives have always had a greater influence on the policy. China’s fertility policy adjustment has been carried out cautiously along the steps of “double only two children – single two children – comprehensive two children”. After the implementation effect of the comprehensive two child policy in 2016 was significantly lower than expected, there are still officials in the field of family planning saying that “comprehensive two child policy has met the needs of most families. If the supporting measures are improved, there is still potential to release in the future”.

Policy recommendations: fully liberalize and encourage fertility as soon as possible, and actively respond to the aging population

Population is not only the fundamental purpose of economic and social development, but also the basic element of economic and social development. The adjustment of fertility policy is the most fundamental and important supply side structural reform. Different from other crises, the population crisis caused by long-term low fertility rate has a long-term nature and its impact appears slowly, but once it breaks out, it is difficult to contain it. We suggest that:

On the one hand, we should fully liberalize and encourage childbearing as soon as possible, return the right of childbearing to family autonomy, and accelerate the construction of a fertility support system.

One is to implement differentiated individual income tax deduction and economic subsidy policies, covering from pregnancy health care to the end of 18-year-old or academic education. To explore the establishment of a comprehensive system of encouraging fertility from pregnancy health care to childbirth during pregnancy to the end of 18-year-old or academic education, including pregnancy health care subsidies, hospitalization childbirth subsidies, child care subsidies, education subsidies, family income tax deduction, and direct economic subsidies for low-income people who do not meet the individual income tax standards. Moreover, according to the actual situation, all localities can further differentiate on the basis of national policies.

The second is to increase the supply of care services, vigorously increase the rate of 0-3-year-old child care from the current 4% to 40%, and provide subsidies for inter generational care. We will vigorously encourage and support employers and social forces to set up infant care service institutions, and form a service network of full day care, half day care, time care and temporary care. At the same time, subsidies should be provided to grandparents who do not need to go to nurseries but are taken care of by grandparents in order to improve the enthusiasm of grandparents and reduce the pressure of parental care.

The third is to further improve the protection of women’s employment rights and interests, and implement preferential tax policies on childbirth for enterprises, and accelerate the construction of a reasonable and effective sharing mechanism between the state, enterprises and families. On the one hand, it is necessary to further promote the implementation of maternity leave and lactation leave system, properly solve the treatment guarantee of extension of maternity leave and paternity leave for men, and impose economic or administrative penalties on units that damage women’s employment rights and interests. On the other hand, according to the size of female employees and the annual fertility situation, a certain degree of tax incentives should be implemented to reduce the birth costs borne by enterprises. The merger of maternity insurance and employee medical insurance started in 2017, which is conducive to expanding the coverage of maternity insurance and improving the convenience.

Fourth, we should strengthen the protection of the equal rights of childbearing out of wedlock. Although illegitimate childbirth is not encouraged, women and their children still need to be given all equal rights, especially in terms of settling down and entering school, without discrimination. Fifth, we should increase investment in education and medical care, maintain long-term stability of housing prices, and reduce the direct cost of support. We should increase investment in pre-school education, vigorously increase the supply of public kindergartens, extend nine-year compulsory education to twelve years, and at the same time, promote education reform, and effectively eradicate the phenomenon that “homework becomes parental work”. We should increase medical investment, promote the reform of medical and health system, and effectively reduce medical expenses. We should adhere to the positioning of “no speculation on housing and housing”, implement the new land linkage with the increase of permanent resident population as the core, and maintain the stability of real estate financial policies, improve the long-term mechanism for the healthy development of the real estate market, improve the housing market system and housing security system, so that all people can live in.

On the other hand, we should actively respond to the aging population, create high-quality products and service system for the elderly, and build an elderly friendly society.

First, we should accelerate the transfer of state-owned assets to supplement the gap in social security, promote the national overall planning of social security, and play an important role in the second and third pillars of the pension security system. The transfer of part of state-owned capital by the central and local governments to replenish the social security fund will be completed by the end of 2020, and the follow-up work can be continued according to the situation. At present, the gap of social security in various regions is seriously unbalanced, which can be improved to the level of social security in provinces and cities where the income is not enough to pay. At present, China relies excessively on the first pillar of basic endowment insurance (accounting for 85%), while the second and third pillars represented by enterprise annuity and occupational pension, commercial health insurance and commercial endowment insurance purchased by individuals account for a relatively low proportion.

The second is to build a lifelong learning system in which the elderly can learn, encourage enterprises to retain and employ older labor force, and appropriately postpone the statutory retirement age. The legal retirement age of Chinese men is 60 years old, which is lower than that of Japan (65), South Korea (61), Britain (65) and the United States (66); the retirement age of women is 55 years old, which is lower than that of Japan (65), South Korea (61), Britain (63) and the United States (66) (58). We should build a lifelong learning system for the elderly, improve the level of human capital for the elderly, eliminate the obstacles for employers to retain and employ the elderly labor force, and strengthen the incentive for the elderly labor force to extend their career by reforming the pension system.

The third is to create a high-quality service and product supply system for the elderly. We will promote the construction of elderly care talent team, accelerate the construction of a multi-level elderly care service system based on home, community-based, fully developed institutions, and organic combination of medical care and nursing, improve the scientific and technological level of elderly service, and increase the support of elderly health science and technology.

Fourth, building a friendly society for the elderly. We should carry forward the traditional Chinese filial piety culture, carry forward the culture of respecting the elderly, and build a social environment for the aged, filial piety and respect for the elderly. To make up for the elderly travel difficulties and participate in the public service short board, to create conditions for the elderly to enjoy social education, culture, spirit and entertainment resources. We should strengthen the legal environment to deal with the aging population and protect the legitimate rights and interests of the elderly. To form a good atmosphere for the participation of the elderly, family, society and government. More reading: Zeping macro: 2019 China Fertility Report The problem of remaining men is becoming more and more serious Dai Deliang: 2020 China new infrastructure (download attached) RMB internationalization report 2020: RMB ranks the sixth largest payment currency in the world (download attached) yiou think tank: 2020 remote office Research Report (download attached) Dr. clove: 2020 National Health insight report (attached download) Shell Research Institute: 2020 wedding room consumption survey report Jingdong Research Institute: 2020 adult products consumption report (attached download) 2020 Chinese lottery map: which province has the most expensive betrothal gifts? Fast hand big data Institute: 2020 Kwai Kwai maternal ecology report (download)

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