Towards 750 million inhabitants in China?

China’s aging is one of the main challenges the country is facing (see article here). Debates on liberalization and the authorization to have a third child are multiplying. On October 25, the economist Ren Zeping 任泽平 published an annual report on demographics which proposes to give back the autonomy to the couple in terms of birth and to have a third child. Without change, the country faces a population decline that could bring it down to 750 million people by the end of the century. The study began as follows: “The number of births in China continues to decline, the desire to have children has decreased considerably, and aging is accelerating 中国出生人口持续下降,生育意愿大幅降低,老龄化加速到来. “He divided his analysis into three parts: 1. China’s aging is accelerating as it approaches population peak, 2. Three widely held misconceptions about China’s population 3. Policy recommendation: Encourage births as soon as possible and actively address population aging.
It analyzes the causes of this aging at all levels, economic, natural, and political. It shows the decision-makers’ misdiagnosis and indicates the concrete measures that should accompany births’ liberalization. The rest of this article is a summary of his work, rich in information.

China’s aging is accelerating as the demographic peak approaches

1.1 China’s birth rate continues to decline

Baby-boom then drop in births.
The People’s Republic of China has experienced three waves of baby boomers, with an average birth of 21 million per year in 1950-1958, 26.28 million in 1962-1975, and 22.46 million in 1981-1994, before gradually declining to about 16 million in 2003-2012, including 16.35 million in 2012. The birth rate fell from 6 before the 1970s to 2 in 1990 and back 1.5-1.65 after 2010. The fourth cycle of the baby boom was due to arrive after 2010, but the long period of strict family planning has won the day. In this context, the one-child policy was finally relaxed at the end of 2012, but the results were less than expected, with 16.4, 16.87, and 16.55 million births in 2013-2015. At the end of 2015, the complete liberalization of the two-child policy led to an increase in childbirth in 2016 with 17.86 million, marking a peak since 2000; but the trend was not confirmed in 2017, and the decline resumed: 2017, 17.25; 15.23, 2018 and 14.65, 2019.

The decline in births is accelerating :
Births per 10,000 people
Estimate

The causes
The significant reduction in the decrease in the number of births in 2019 is mainly due to a decline in the number of women of childbearing age (15 to 49 years) in 2018. The data show this: 4.91, 3.98, 7.15, and 5.02 million from 2016 to 2019. The number of women aged 20 to 35, who accounted for more than 85% of births, decreased by 1.94, 2.64, 3.98, and 3.31 million. The birth rate jumped to 1.7 in 2016, a significant increase from 2015, slightly reduced in 2017, decreased significantly to about 1.5 in 2018, and remained virtually unchanged in 2019.
The direct costs of high housing, education and health care, and retirement to prepare inhibit “reproductive behaviour.” First, housing prices are rising rapidly, with the ratio of the population’s real estate borrowing to available income 居民房贷余额/可支配收入est rising from 16.2% to 47.6% from 2004 to 2018, pushing the debt ratio from 28.6% to 88.4%. The cost of education has increased significantly, especially since the supply of public kindergartens is very insufficient, forcing families to choose more expensive private kindergartens, and some schools have turned “homework” into parental duties, making it very difficult to educate children; the number of children attending public kindergartens in China increased from 95% to 43% between 1997 and 2018. Medical costs continue to rise, with health care spending increasing 27-fold between 1995 and 2018, far more than the 9.2-fold increase in disposable income. Fourth, the “4-2-1” family structure of single-child couples requiring grandparental care is a barrier to the desire to have children.
The gap between female and male labor force participation rates in China widened from 11.6 to 14.8 percentage points between 1990 and 2019, reversing developed countries such as the United States, the European Union, and Japan.
1.2 China’s population is aging rapidly and will enter a profoundly aging society in 2022.

Too old, too fast
In 2019, China’s population aged 65 and over will account for 12.6%. In the United States, Japan, and Korea, where the proportion of the population aged 65 and over has reached 12.6 percent, GDP per capita is around $24,000, while China comes to the 10,000 thresholds. China’s level of aging increased on average by 0.2% per year from 2001 to 2010 and by about 0.4% from 2011 to 2018., Globally, in 2019, China ranked 61st among economies in terms of the degree of aging, 2.2 points higher than upper-middle-income economies. In 2019, the proportion of the world’s population aged 65 and over approached 9.1 percent, 18.0 percent, and 10.4 percent in high-income and upper-middle-income economies; the top three economies in terms of the degree of global aging are Japan, Italy, and Portugal, with proportions of 28.0 percent, 23.0 percent, and 22.4 percent, respectively. In terms of international comparison between the degree of aging and the level of economic development, the United States, Japan, Korea, and China achieved a GDP per capita of $10,000 in 1978, 1981, 1994, and 2019 respectively, while the proportion of the population aged 65 and over was 11.2%, 9.2%, 5.8%, and 12.6%, respectively. The United States, Japan, South Korea, and China reached 12.6% of the population aged 65 and over in 1990, 1992, 2015, and 2019, while GDP per capita was $24,000, $30,000, $27,000 $10,000.
In terms of development trends, China’s population is aging at an unprecedented speed and scale. It will enter a profoundly aging society accounting for more than 14 percent in 2022 and a super-aging society accounting for more than 20 percent by 2033, after which it will continue to grow rapidly to reach about 35 percent in 2060. With declining birth rates and increasing longevity, aging is a global phenomenon, but China is aging unprecedented because of its extended family planning history. Compared to the situation in developed countries, it took 126 years for France, 46 years for the United Kingdom, 40 years for Germany, and 24 years for Japan (1971-1995) to move from deep aging, with 7% of the population aged 65 and over, to super-aging, with more than 14%; it took 28 years for France (1990-2018) and 24 years for Germany (1971-1995) to move from deep aging to super-aging, with more than 20% of the elderly population. China’s population aged 65 and over exceeded 7% in 2001 and has entered an aging society. China is expected to become a profoundly aging society in 2022 and then a super-aging society in 11 years, around 2033. Moreover, because of its large population base, China’s elderly population is also unprecedented: in 2019, China’s population aged 65 and overreached 176 million and is expected to exceed 376 million by 2050, peaking at 414 million in 2058, by which time about one in three Chinese will be 65 or older. By 2019, China will have more than 32 million people aged 80 and over, or 2.3% of the population. It is projected that there will be about 53 million in 2030, or 3.8% of the people, 130 million in 2050, or 10.3% of the population; a peak of 174 million in 2073, or 17.1% of the population, and 156 million in 2100, or 20.8% of the population.

Acceleration of the proportion of older people:

The elderly population (from 65 years of age) in hundreds of millions, left
Proportion, right

Limitation of competitiveness
The Chinese population’s median age increased from 21.9 to 36.5 years between 1980 and 2015 and is projected to reach 43.0 and 50.7 years in 2030 and 2050, respectively. Internationally, the median age of the population in the United States, Europe, Japan, and India was 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, respectively. By 2050, China’s population’s median age will be significantly higher than that of the United States, Europe, and India, limiting international competitiveness.
The hole of the retreats
The aging of the population makes the difficulty of social security revenues and expenditures increasingly evident; the pension hole will widen. The balance of income and cost of the Social Insurance Fund in mid-2018 was 1,162.2 billion yuan. The actual surplus after excluding financial subsidies was -603.3 billion yuan, a sixth consecutive negative year. Pension insurance accounts for 70 percent of the social security system’s budget, and the actual surplus of the pension fund in 2018 was -450.4 billion yuan, also harmful for six years. The current social security deficit is mainly due to state-owned enterprises’ historical debts from the planned economy era. A part of the population did not contribute but received pensions. In November 2017, the State Council implemented a plan to transfer 10 percent of state-owned enterprises’ capital by the end of 2020 to help fill the gap. However, as the population continues to age, the problem of financing pensions will become more acute. In cities, the dependency ratio (number of active/retired workers) has fallen to 2.55 in 2018. Four provinces were unable to make ends meet, 18 provinces had a payment term of fewer than 12 months for the accumulated balance, and in eight provinces, the dependency ratio had fallen to less than 2. of these, the Heilongjiang Pension Fund has been struggling since 2013. Besides, as the aging process intensifies, pressure on medical expenses will also increase. According to a survey by the National Health Service, from 2003 to 2013, the two-week patient/surveyed population ratio of residents in China’s survey areas increased from 14.3 percent to 24.1 percent; among them, the prevalence rate of people aged 65 and over increased from 33.8 percent to 62.2 percent, and the rate of the elderly population in 2013 was 2.58 times higher than the average.
1.3 China’s population has surpassed 1.4 billion, but the downward trend is about to begin

Overestimation of data
In 1949, China’s population (excluding Hong Kong, Macao, Taiwan, and overseas Chinese) was 540 million. It exceeded one billion in 1981 and 1.4 billion in 2019. The Chinese population took 12 years to rise 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) targets 1.42 billion people in 2020, and to reach this projected target would require an increase in China’s population of about 20 million in 2020, which is not possible. The National Population Development Plan (2016-2030) is mistaken in its projections because it overestimates the overall two-child policy’s impact on fertility growth. Indeed, it forecasts that the birth rate will be around 1.8 in 2020 and 2030, which would result in a population peak of 1.45 billion around 2030.
The United Nations has also overestimated China’s population growth, with the Chinese scenario projecting a peak of 1.46 billion people in 2031. The United Nations World Population Prospects (2019) presents nine scenarios for projecting China’s population, with the medium scenario assuming a total fertility rate of 1.70, 1.72, and 1.73 for 2015-2020, 2020-2025, and 2025-2030, respectively, peaking at 1.46 billion people in 2031. On the other hand, its low scenario assumes a total fertility rate of 1.45, 1.32, and 1.23 for 2015-2020, 2020-2025, and 2025-2030, respectively, with a population of 1.45 billion in 2024.

750-800 million in 2100
We expect China’s population to experience negative growth during the 14th Five-Year Plan period, then decline sharply from 2050 onwards and bottom out at 800 million by 2100. China’s share of the world’s population will fall from about 19% to 7%. With an estimated birth rate of 1.4, China’s population will reach a peak around 2022. The decline is slower in the first 25 to 30 years after peak population, but it will become much faster when the population born during the high fertility period of 1962-1975 reaches the end of its life. The decline will be 9% from 2022 to 2050, 22% from 2050 to 2075, and 25% from 2075 to 2100. China’s share of the world population was 22% in 1950. It has decreased slightly to about 19% in 2019. It will drop to about 7% in 2100. As this decline continues, China will lose its advantage, and its overall strength will be affected.

Forecasts on evolution :
The three colors represent low, medium, and upward assumptions with no change in measures :
Unit (left): 100 million

reduction of population in China

1.4 Disappearance of the demographic “dividend” and decline in China’s potential economic growth rate

In terms of economic growth, the proportion of the working-age population peaked in 2010 and is expected to decline by 23% between 2019 and 2050; China’s economic growth rate has increased from 10.6% to 6.1% between 2010 and 2018 and is about to enter the “5″ era. The demographic dividend has been an important factor in sustaining China’s strong economic growth in the past; after the reform and opening of 1978. China grew rapidly to become the world’s second largest economy, relying on a large and young workforce and the huge unified market that resulted. The second wave of baby boomers, from 1962 to 1975, was the main building force during the 40 years of reform and opening, producing and saving more and consuming less, resulting in a soaring savings and investment rate. Savings surpassed investment and partly generated a trade surplus, while excess liquidity and rising per capita income boosted consumption and the economy’s potential growth rate. However, in the context of a long-term low birth rate, the proportion and size of China’s working-age population (15-64 years) peaked in 2010 and 2013, respectively, and the demographic dividend disappeared, leading to a decline in the potential growth rate of the Chinese economy and prompting a shift in gears. In absolute terms, the total dependency ratio of China’s current population is about 40 percent. The future period is still in the “demographic window of opportunity” (less than 50 percent) when the demographic burden is relatively light. According to the 2010 Chinese census, the population born in the 1980s, 1990s, and 2000 is 219 million, 188 million, and 147 million, respectively. The 1990s generation is 31 million fewer than the 1980s generation, and the 2000s generation is 41 million fewer than the 1990s generation. This trend will continue. With labor supply declining and costs rising, some manufacturing production has begun to migrate to Southeast Asia, India, and other countries.

Structural change in consumption
In terms of consumption, aging brings about structural changes in consumption, such as the share of health care that will gradually increase. According to the life-cycle theory of consumption, older people have an average propensity to consume. Aging will increase the rate of consumption but will reduce the rate of consumption growth. In China, consumption as a percentage of GDP reached its lowest level in 2010 and increased from 35.6 percent to 39.0 percent between 2010 and 2018, while the growth rate of consumer spending dropped from 15.3 percent to 9.5 percent. There are also differences in consumption preferences between the different generations, e.g., the post-80s prefer maternity and automobiles, the post-60s and 70s prefer alcohol, and the pre-60s prefer pharmaceuticals and health care so that changes in the age structure of the population have different impacts on different industries. For example, the 25-54 age group peaked in 2017, and the rate of growth in tobacco and alcohol sales will slow after that; the 20-50 age group, the major homebuyers, peaked in 2013, as the amount of new residential construction reached 1.4 billion square meters in 2011 and 2013; the growth rate of consumption of appliances, furniture, building decoration, and other real estate-related industries peaked in 2010; the 25-45 age group of significant car buyers peaked in 2003. Car sales growth is declining in a volatile environment, with negative growth for the first time in 2018, but new energy-efficient vehicles have enormous potential; aging boosted health care consumption from 6.2% to 7.8% in 2013-2018.

2. Three widely held misconceptions about the Chinese population

For a long time, the Chinese population has been the subject of endless debate, focusing on three main aspects: 1) What is the Chinese population’s appropriate size? 2) Is the number of people less important than the quality of the population? 3) Should the Chinese population be liberated and encouraged to have children immediately?

2.1 What is the appropriate population size for China?

The “appropriate population theory” is the theoretical cornerstone of the family planning policy, and many support this view, which is the source of all controversy. Opposing views: Hu Baosheng, Song Jian, Tian Xueyuan, and others estimated in the early 1980s that China’s appropriate population would be about 700 million people in a century; if no population control is carried out, China’s population could reach 4.3 billion by 2080, arguing the need for the one-child policy.
We believe that, first, an “appropriate population” is an abstract concept that requires many long-term assumptions that are difficult to measure from a historical perspective.
Second, the population’s carrying capacity improves with technological progress, and there is no static, appropriate population in absolute terms. In the middle and end of the twentieth century, the idea of a “population explosion” prevailed, and in 1948 the British researcher Wiliam Voget indicated that the maximum carrying capacity of land and natural resources is 2.2 billion people and that human beings are threatened with extinction. In “The Bomb P,” Paul Ehrlich of Stanford University said that the world’s population, then estimated at 3.5 billion people, had exceeded the carrying capacity of the planet’s ecology and predicted uncontrollable famines and unrest in the 1970s and 1980s. Today, the world population is close to 7.6 billion, without experiencing resource depletion or environmental collapse. The carrying capacity of resources and the environment for the population has increased significantly with technological progress. For example, while humans continue to explore for crude oil and natural gas, the global ratio of crude oil storage and recovery (remaining reserves to the production of the year) from 1980 to 2017 increased from about 30 years to 50.2 years than decreasing. The natural gas storage and recovery ratio also fluctuated from 49.9 years to 53.6 years. According to the World Bank, between 1960 and 2015, the share of global fossil fuel consumption decreased from 94.1% to 79.7%, and the percentage of nuclear and alternative energy consumption increased from 2.7% to 13.4%.

2.2 The key is to improve the population’s quality; is the population’s size less critical?

In today’s society, the importance of human capital is more and more important. More and more artificial intelligence will replace manual labor in large numbers. Is the size of the population still so significant? Three hundred million people in the United States are more potent than 1.4 billion people in China! Counter-argument 1: National power is mainly determined by the population’s quality, not by its quantity, and scholars like Li Xiaoping and Cheng Enfu argue that fewer people can generate a higher GDP per capita.
Quantity and quality are important
We believe that, firstly, the quantity and quality of the population jointly affect national power. On the one hand, a large population is an advantage and not a disadvantage for a country; the ratio of China’s GDP to that of the United States increased from 6% to 63% from 1978 to 2018, and on current trends, China’s total economic output will exceed that of the United States by 2028. If China’s population were currently only 300 to 700 million, the gap with the U.S. would be much larger, and the path to national rebirth even further away. On the other hand, a significant reduction in population would lead to the removal or even disappearance of a large number of cities and industries. For example, in 1960-2015, the population of Yubari, Japan’s coal capital, fell from 108,000 to 8,843, and the number of people over 65 years of age rose from 9.1% to 48.6% in 1980-2015. The city went bankrupt in 2006. According to current trends, China’s population will fall from 1.4 billion to 750 million in 2019-2100, and its global share will fall from 19% to 7%. The U.S. has long encouraged the birth and introduction of quality immigrants, especially during the two World Wars, with a stable environment to attract large numbers and talent. From 1900 to 2018, the U.S. population grew from 76.21 million to over 330 million. The United Nations estimates that by 2100 it will reach 430 million, which plays an essential role in shaping and consolidating the United States’ position as a great power.

The population consumes, produces, and creates
Second, the population is not only a consumer, but it is also a producer, and a large population creates a large demand market and provides sufficient labor and more talent on the supply side. The view that fewer people have a higher GDP per capita sees only the population’s consumption in the economy, ignoring the creative value of the economy’s population. For GDP per capita, the population is the denominator and acts on the molecule, and the role is more fundamental, more sustainable. No historical experience proves that the total population and GDP per capita are negatively correlated. In fact, no country or region can achieve rapid economic development with a declining population. In his State of the Union address to the Federal Assembly at the beginning of 2020, Russian President Vladimir Putin stated that Russia’s destiny and history are at stake. Prospects depend on the population. The birth rate of 1.5 is too low. Russia needs to establish a clear, broad, and systematic family support program, with access to a “maternal fund” for families with one child from 2020.

The advantages of a large market
On the demand side, profit margins in major markets allow companies to invest more in research and development; more companies can refine the division of labor and improve production efficiency. Competition between companies is more intense, and the motivation for innovation stronger. A large population promotes innovation. Even small demands can form a market in a large market, and small technological innovations can survive. People always think that more people lead to crowded subways, but the truth is that cities with fewer people may not even build subways. Because of its large population, China has the world’s largest high-speed rail network, with 35,000 kilometers by the end of 2019. At the same time, China is also the third region after the United States and Europe to develop its own sizeable civil wide-body aircraft. Currently, only the United States, Europe, and China have a large enough market to meet the wide-body industry scale. Due to the vast consumer market, China’s Internet economy is growing irresistibly, with sectors such as e-commerce, mobile payments, the sharing economy, and artificial intelligence developing rapidly. According to CB Insight, at the end of 2018, the number and value of unicorns in China represented 38% and 42% of the world total, respectively, and the number of new unicorns in China increased from 1 to 32 per year from 2013 to 2018, and in the United States from 15 to 53. The gap between China and the United States is narrowing rapidly.

A large talent pool
On the supply side, the population is the foundation of talent, and a large population is the only way to have more talent and a more substantial capacity for innovation. China’s population with a university degree or higher is close to 200 million, the world’s largest. A large population means a considerable talent pool. From 1982 to 2015, the size of China’s higher education population grew from 6.04 million to 171 million, or 0.6% of the total population to 12.4%, making China the largest talent pool in the world. According to World Bank data, China’s gross enrolment ratio (the number of people receiving higher education relative to the corresponding age population) rose from 12.9 percent to 50.6 percent in 1970-2018, while the gap gradually narrowed as the U.S. increased from 47.3 percent to 88.2 percent in 1971-2017. The number of higher education graduates in China from 1.04 million in 2001 to nearly 7.53 million in 2018 increased by 627%. High-level talent has become the backbone of China’s industries, and thanks to a large and highly qualified team of engineers, China is gradually gaining leadership in several fields.

As we approach the age of artificial intelligence, do we still need so many people? Counter-argument 2: AI will displace many jobs, and a large population will become a burden.
While AI will replace some traditional jobs in the industry, it will also create increased demand for jobs in the new economy and new industries. All technological advances in history have led to a reduction in the workforce per unit of production in traditional sectors without a decline in total employment, resulting in the simultaneous creation of new and additional jobs. The advent of the automobile, for example, has resulted in unemployment for forklift drivers but has created jobs such as bus and truck driving, automobile development, manufacturing, and repair. Historical experience shows that as agricultural productivity increases and the farm labor force declines, “unemployed” farmers enter factory-based manufacturing; as industrial productivity increases and the number of workers declines, “unemployed” workers enter the service sector. The period 1989-1999 saw the emergence of the automobile. Employment in the U.S. manufacturing sector fell from 18.06 million to 12.81 million in 2018, or 29%. Still, work in the service sector rose from 18.83 million to 129.31 million, 587%, and total employment increased rather than decreased.
IA could replace 26% of employment over the next 20 years and generate 38% more employment. The study “The Net Impact of Artificial Intelligence and Related Technologies on Employment in China,” published by PwC in 2018, predicts that AI will create a 12% net increase in employment in China over the next 20 years, equivalent to an increase of about 90 million jobs. Not only does AI have a substitution effect on work, but it also has an impact on income, i.e., AI is more profitable, which leads to lower prices for the company’s products and higher real incomes for consumers, which in turn encourages companies to expand production, hire more workers and create more jobs. Moreover, AI cannot replace the function of human consumption, and the decrease in demand due to population reduction would be a hindrance to economic development.

2.3 Should full liberalization and encouragement of procreation be immediate?

In recent years, the question of full liberalization of the birth control system has been the subject of lively debate. Counter-argument 1: Total liberalization of the birth rate will lead to an increase in the number of births among the rich and the poor and a decrease in the number of births among the middle class, which is not conducive to social justice; the birth rate in rural areas could increase explosively, and the quality of the population would decline. We believe that childbirth is the fundamental right of everyone and that the right to have children must return to the autonomy of the family; total liberalization of fertility is equitable respect for all families without discrimination; the current rural fertility rate is still low so that it is impossible for the population born in rural areas to increase dramatically. Rural population does not mean low quality population. When one considers the conditional and differentiated fertility policy previously adopted for different ethnic groups and urban and rural areas, total liberalization is more equitable.
(2) Should the adjustment of fertility policy be cautious or accelerated? Counter-argument 2: The policy should be adjusted cautiously, either by encouraging more vigorously the birth of two children or by liberalizing the birth of three or four children with conditions. We believe that the birth policy has been artificially delayed for too long and that it should not be further delayed but should be fully liberalized and encouraged immediately. The reason for the immediate liberalization and encouragement of birth is that the current demographic situation is urgent because we are now in the window of opportunity for the delivery of children in the middle and end of the third wave of the baby boom, and the later the adjustment is, the weaker the results will be with more effort.

However, Zhai Zhenwu and others have estimated that the “one-child policy” will result in a peak birth rate of 49.95 million and a peak fertility rate of 4.5, which has repeatedly delayed policy adjustment. At the beginning of the twenty-first century, during the heated discussions on population policy, the conservative camp prevailed, and the adjustment of fertility policy was repeatedly delayed. Song Jian and others in 2007 argued that the birth rate index has remained stable at about 1.8 since 1990 and recommended that measures should not change during the 11th five-year plan. Then the central government issued a document calling for all efforts to stabilize the low birth rate. Zhai Zhenwu in 2014 estimated that if the “two-child policy” had been fully launched in 2012, the total birth rate would peak at 4.5 and the number of births at 49.95 million, suggesting that the “two-child policy” should be postponed. Zhai Zhenwu (2015) estimated that the one-two child policy would result in an annual increase of 1.3 to 1.6 million births over the next 4-5 years, for a total of 6.6 million new births. Births in 2014 increased by only 470,000 compared to 2013, and in 2015 they even decreased by 320,000 compared to 2014. Zhai Zhenwu in 2016 also believed that the “one-child policy” would result in 1.6 to 4.7 million new births per year for the next five years. In 2015, the central government implemented the comprehensive two-child policy, but the number of births in 2016 was only 0.47 million more than in 2015. The following years showed failure: an increase of 1.31 million in 2016, a decline of 630,000 in 2017, and even a drop of 2 million in 2018. Although Zhai Zhenwu’s projections are significantly lower than before, they are not realistic. Conservatives have always had more influence on politics. In 2016, even after implementing the less effective two-child policy, some family planning officials still claimed that “the comprehensive two-child approach has met the needs of most people: Encourage births as soon as possible and actively address the aging population.

Population “is” not only the fundamental objective of economic and social development but also the basic building block of economic and social development. Adjustment of birth policy is the most essential and crucial structural reform on the supply side. Unlike other crises, the demographic crisis triggered by a chronically low birth rate is long-lasting, and its effects are slow to appear, but once it erupts, it is difficult to contain.

On the one hand, full liberalization and encouragement of births should be implemented as soon as possible to restore the right to family autonomy and speed up the implementation of a birth support system. First of all, a differentiated policy of individual tax credits and financial subsidies should be implemented, covering the period from pregnancy care to the age of 18 or the end of university studies. Explore the implementation of a comprehensive incentive system, from pregnancy care to childbirth up to the age of 18 or the end of university studies. Besides, localities can further differentiate their policies according to their actual situation. Second, the supply of childcare will be increased, the rate of entry into childcare for 0-3-year-olds is to rise from the current 4% to 40%, and subsidies will be provided for care. Employers and social agencies are strongly encouraged and supported to develop child and infant care services, forming a full-time, half-time, hourly, and temporary care services network. Third, the protection of women’s employment rights and interests is further improved. Tax breaks for childbirth are offered to businesses to accelerate establishing a reasonable and effective cost-sharing mechanism for birth between the State, businesses, and families.
On the one hand, further promote the implementation of maternity and breastfeeding leave, adequately address the protection of extended maternity and paternity leave for men, and impose financial or administrative sanctions on organizations that undermine women’s employment rights and interests. On the other hand, several tax breaks have been implemented to reduce the cost of childbirth borne by companies, depending on their employees’ size and their annual maternity status. The pilot merger of maternity insurance and employee medical insurance began in 2017, extending maternity insurance coverage. Fourth, equal rights protection for births outside marriage is being strengthened. Although childbirth outside of marriage is not encouraged, women and their children born out of wedlock should still enjoy all equal rights, including the right to settle in a home and enroll in school, without discrimination. Fifth, increase investment in education and health care, maintain long-term stability in housing prices, and reduce the direct costs of raising children. Investment in pre-school education will be increased, the supply of public kindergartens will be significantly increased, and the duration of compulsory schooling from nine years to twelve, while promoting educational reform and effectively eradicating the phenomenon of “homework becoming parental homework. The government will also increase investment in medical care and promote the reform of the medical and health care system to reduce medical expenses effectively. The government will adhere to the principle of “Housing, not speculation,” implement new measures in the land sector focused on the growth of the resident population, maintain stable real estate financial policies, perfect a long-term mechanism for the healthy development of the real estate market, and improve the housing market and housing security systems so that everyone can have a place to live.
On the other hand, it will actively respond to the aging population, create a system of high-quality products and services for the elderly, and build an age-friendly society. First, it will accelerate the public capital transfer to bridge the social security gap and promote national coordination of social security. The transfer of central and local government capital to replenish social security funds will be completed by the end of 2020 and can be continued if necessary. At present, there is a severe imbalance between regions in social security. The move to national coordination can smooth out regional differences and ensure that the level of social security is maintained in provinces and cities where income exceeds expenditure. At present, China is too dependent on the first pillar of basic pension insurance (which accounts for 85 percent). The company’s second and third pillars and occupational pensions, private insurance, and individual pension insurance are relatively low. The second is to establish a lifelong learning system for older people, encourage companies to retain and employ a more aging workforce, and raise the statutory retirement age in due course. The legal retirement age for men is 60, lower than in Japan (65), Korea (61), Great Britain (65), and the United States (66); the legal retirement age for women is 55, lower than in Japan (65), Korea (61), Great Britain (63) and the United States (66), and India (58).
Establish a system of lifelong learning for older people, raise the human capital of older people, remove barriers that prevent employers from retaining and hiring older workers, and strengthen incentives for older workers to extend their careers through pension reform and other measures. Third, a high-quality system for providing services and products to older persons will be put in place. China will promote the development of a workforce for the elderly, accelerate the construction of a multi-level, home-based, community-based, fully institutionally developed and organically integrated system of services for the elderly, improve the level of technology and computerization of services for the elderly, and increase scientific and technological support for the health of the elderly. Fourthly, the construction of an age-friendly society. We will continue the traditional Chinese culture of filial piety, promote respect for the elderly, and build a social environment of filial piety and care for the elderly. It will also compensate for the difficulties faced by the elderly in traveling and participating in public services and create conditions for them to enjoy the educational, cultural, spiritual, and recreational resources of the society. The rule of law environment to deal with the aging population will be strengthened, and the legitimate rights and interests of the elderly will be safeguarded. An environment conducive to the elderly, families, society, and government must be created.

Source :
任泽平:建议开放三胎 以应对人口少子化、老龄化

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