May 12, 2021

Asia

CHINA: Census shows growing population, but demographic challenge is severe

BY Gabriel Wildau

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( 4 mins)
  • The results of China’s 2020 census challenge a media report last month claiming that China’s population shrunk last year for the first time since the 1960s.
  • But the figures illustrate challenges with demographic aging and regional economic disparities; the rust-belt northeast suffered crippling population declines due to outward migration, and its population skews older than other regions.
  • A flat working-age population means that future economic growth must derive largely from increased labor productivity; policymakers see urbanization as the key tool for doing so.

China’s statistics bureau announced the results of its one-in-a-decade census on 11 May. The results challenge the Financial Times‘ anonymously sourced report that the census would show the country’s first year-on-year population decline since the Great Famine of 1959-1961.

Last week’s note on the FT report explained that the supposed population decline in 2020 likely reflected the raw census total before applying statistical adjustments. The official announcement appears to confirm this hypothesis, noting that the adjustment factor – which is meant to account for those not captured by the census – was 0.05% for the 2020 census. While skeptics may regard this adjustment as a fudge factor subject to political manipulation, the latest adjustment is lower than the 0.12% and 0.18% adjustments applied to the 2010 and 2000 censuses.

The latest figures, which show China’s total population at 1.412bn in 2020, also suggest that official population data for 2011 to 2019 – non-census years when population estimates are based on sample surveys – may be revised upward. The result will be to smooth out the apparent acceleration of the population growth rate for 2020, which emerges from comparing census and non-census years.

While China’s population is still growing, the census shows that it is also aging. Most of the total population growth occurred in the over-60 cohort, whose share of the total population rose 5.4 percentage points to 18.7%. Meanwhile, the share of China’s population aged 15-59 fell by 6.8 percentage points.

The census also highlights big regional disparities in economic dynamism. The prosperous export and technology hubs of Guangdong and Zhejiang saw their populations rise by 21% and 19%, respectively, over 2010. Meanwhile, the rust-belt northeastern provinces of Jilin and Heilongjiang suffered population declines of 12% and 17%, respectively. In terms of raw numbers, Heilongjiang’s population fell by 6mn to 32mn, while Guangdong added 22mn people to reach 126mn. These shifts reflect the migration of young people to more prosperous, high-growth regions. The result is that population aging is especially severe in the northeast.

For economic growth, a flat or declining working-age population means that Chinese GDP growth must derive largely from increases in labor productivity rather than increased labor supply. In this regard, the census produced two pieces of encouraging news. First, the number of college graduates nearly doubled from 2010 to 2018mn. Second, China’s urban population rose 35% from 2010 to 902mn, reaching 64% of the population – a figure that includes both rural migrants living in cities and those living in cities with an urban household registration (known as hukou). All else equal, urban migration raises labor productivity since urban jobs are more productive on average than agricultural work or other rural employment.

China’s 14th Five-Year Plan includes a target of 65% urbanization by 2025, a target that now appears conservative. The plan also calls for loosening restrictions on rural migrants obtaining an urban hukou, which should encourage migration by granting migrants access to social welfare benefits in urban areas. However, the effect on productivity will be dampened because the plan calls for loosening hukou restrictions primarily in smaller cities, based on concerns that megacities like Beijing, Shanghai, and Shenzhen are overcrowded. But since megacities are also the location of the most productive jobs, there is a tradeoff between protecting the quality of life in megacities and enhancing productivity.

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