China poor fertility numbers could mean high inflation and interest rates for the world

China’s National Bureau of Statistics has been publishing the data on the “age-specific fertility rate of child­bearing women” – the measure of how many children were born to different age groups – annually since 2004.
But in the 2017, China’s statistics yearbook those figures were removed.

According to figures from the statistics agency, there were 17.86 million births in China last year, up from 16.55 million in 2015. But the age-specific data is important when calculating demographic trends.

The statistics agency’s number, which indicated a fertility ratio of 1.05 in 2015, ran counter to an estimated fertility rate of 1.6 from the National Heath and Family Planning Commission, the body that is responsible for China’s family planning policy and ruthlessly implemented the country’s one-child policy for decades.

Academics and statisticians have raised doubts about the figures over the years and they have been criticised for misguiding policymaking.

Liang Zhongtang, a demographer who sat on the state family planning commission in the 1980s, said China’s fertility rate had failed to show any meaningful increase after the country officially rolled out a universal two-child policy in 2016, adding that could be one reason for the non-disclosure.

“A gap between what the government actually got and what they had expected may persuade them to stop releasing the data,” Liang said.

Yi Fuxian, a long-term critic of China’s birth control policy and a researcher at the University of Wisconsin-Madison in the United States, caused a stir in May by saying that China’s population size had been overestimated by 90 million, and that China’s real population may be smaller than India’s.

The family planning commission said in August that the country’s fertility ratio may have risen to 1.7 in 2016 following the implementation of a two-child policy, heightening the divergence between its data and those from the statistics bureau.

It also announced in June that it would conduct its own research to find out the fertility ratio.

Huang Wenzheng, a senior researcher from Beijing-based think tank Centre for China and Globalisation, said the conflicting numbers between the statistics bureau and the family planning commission may have persuaded the former to stop releasing the data.

Asked on Sunday whether China would soon relax the two-child limit on couples, Li Bin, minister of the National Health and Family Planning Commission, said the authority would use “scientific judgment” of China’s demographic situation to harness family planning policies.

Yi Fuxian, a researcher at the University of Wisconsin-Madison and a long-standing opponent of China’s birth control policy, said more changes could be on the way next year.

“In my best guess, Xi will stop birth control totally at the 3rd plenary session of the 19th party congress [in late 2018],” Yi said.

“Despite moves to unwind the one-child policy, younger people do not need to be prevented from having more than one child; they may require significant encouragement to have any children at all,” the report said.

“If so, the global implications would be massive, given that China’s population is 10 times that of Japan, and given that China doesn’t yet have a sound social security system.

“There’s a chance that ageing, particularly in China, could lead to higher inflation rates and higher interest rates around the world,” the report said.

13 thoughts on “China poor fertility numbers could mean high inflation and interest rates for the world”

  1. “There’s a chance that ageing, particularly in China, could lead to higher inflation rates and higher interest rates around the world,” the report said.

    What is the more concrete logic for this prediction?

  2. Huang Wenzheng, a senior researcher from Beijing-based think tank Centre for China and Globalisation, said the conflicting numbers between the statistics bureau and the family planning commission may have persuaded the former to stop releasing the data.

    So the numbers don’t match and they are “persuaded” to stop releasing data? Problem solved!

  3. Sure, China has its demographic issues. But returns on increased automation and the general climb of the techno-economic ladder should still allow for another 15-20 years of economic growth before a Japan-like stagnation settles in. It is also worth considering that, despite stagnant economic growth, that typical housing sizes in Japan have nearly doubled over the past 25 years.

    I believe demographic transitions can be successfully navigated. The key is to control debt, especially government debt.

  4. Five million jobs have already been rehosted to North America, mostly to Mexico where labor rates are less than in China.

  5. The lower birth rate is a sign of prosperity. 1st world countries have low birth rates. Except for the US which wants to cling to punishing its citizens. In the future with automation, the need for workers will decline significantly. It would be very good to institute the male “pill” asap! Already the US wastes 2 billion dollars on unwanted, unfunded births.

  6. Since inflation is usually caused by spending more than the economy can produce how is that going to ever happen in China? Chinese are usually frugal and old Chinese are the most frugal. It will not happen. And the birth rate is not going to increase much unless the government is planning on forcing people to have more children. More and more people are flocking to the cities. Living in the cities is very expensive and space is tight. I don’t see people having many children.

  7. Those are some ugly Chinese babies in the picture; I hope they are not yours. It is hard to find an ugly baby; good job!

  8. Yup.

    China gets old before it gets rich enough to afford it like the South Koreans & Japanese can.

    As I have been saying for years on NBF forums while the Chicomm fluffing trolls have attacked me for it.

    Amother tid bit: Starting in 2019, the average working Chinese will be older than the average working American.

    China is screwed. Screwed & tatooed.

    As for higher interest rates & inflation in America, savings drawdowns from retiring Baby Boomers will be more responsible for that than whatever happens in China.

    If certain people would stop drinking the Next Big China fluffer Kool-Aid and look at the real picture, thet would have seen this coming, too.

    And you can’t turn demographic destiny around on a dime except extreme measures to reduce populations like war and induced famines. Ask the Russians despite Putin’s semi-Nazi push ro get etnic Russians to have more babies.

    • You are mostly right but no country can afford an inverted population pyramid, not even South Korea or Japan. Taking care of the elderly is not only expensive, it is labor intensive.

    • Actually, a low birth rate is a very good thing. The rise of automation will enhance the productivity and hopefully lead to a better life. It will require a host of changes big and small. As automation replaces human workers a new tax system will be needed to fill in to fund living.

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