China’s Birthrate Drops to 70 Year Low

China’s birthrate fell in 2019 to 10.48 which is a 70 year low. This is between the US at 12 and Japan at 8. This means that China’s 1.4 billion people had 14.65 million births. This is down 565,000 from 2018. China’s birthrate went from 12 up to 13 after they changed the one-child policy to a two-child policy.

China’s birthrate fell 20% from the first year of the two-child policy in 2016. The birthrate is down 13% from the last year of the one-child policy. China is at half the birthrate of the early 1980s.

China’s workforce will drop by 23% by 2050. China will start losing 1% from GDP every year from 2030 onwards as their workforce starts to contract.

China only has a few options to impact these trends.

1. China can completely remove the limitations on children. This might get China back to a birthrate of 11.5 for a couple of years and then it might be a lasting 0.5 annual birthrate increase over time. This would only impact the 2050 workforce with a 21% drop instead of a 23% drop.
2. China needs to very aggressively provide financial bribes for couples to have children and to provide free childcare support for the children. This could have a similar impact as removing the limitations on children.
3. China needs to provide free fertility services. There are about 40 million older couples who would want to have children. If all of those couples could have children or multiple children then there could be 30-50 million boost in China’s 2050 workforce.

If China aggressively uses every one of the above levers they might be able to limit the workforce drop to 15% in 2050.

The other area is for China to raise the retirement age from 59 to about 70-75 from now to 2050. There would need healthcare to keep workings healthy and productive. China’s current workforce has been doing a lot of work in factories while in the future they will need more technical workers.

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