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What are the reasons for China's negative population growth in 2018

Yesterday's News revealed that China has begun to experience negative population growth. Is it causing extreme panic? In 2018, not only did not have 790000 more people as expected, but the number of live births in China was reduced by 2.5 million (14.2%). In 1790 in the middle of the Qing Dynasty, China's population exceeded 300 million, with more than 10 million births, which means that the number of births in 2018 is the lowest since the middle of the Qing Dynasty. So what are the reasons for the negative population growth?

China's population will reach a peak of 1.442 billion in 2029, and enter a sustained negative growth from 2030. In 2050, it will be reduced to 1.364 billion, and in 2065, it will be reduced to 1.248 billion, that is to say, it will be reduced to the scale in 1996. If the total fertility rate remains at the level of 1.6, the negative population growth will appear in 2027 ahead of time, and the population will decrease to 1172 million in 2065, which is equivalent to the scale in 1990.

The report on China's population and labor issues issued by the Institute of population and labor economics of the Chinese Academy of Social Sciences in Beijing on January 3 pointed out that the long-term population recession, especially with the increasing aging, is bound to bring very adverse social and economic consequences. China's negative population growth is irresistible, and it is urgent to carry out research and policy reserve from now on.

The report points out that since the beginning of the 21st century, China's population has undergone several major changes, and there will be new turning changes in the future. These trend changes not only directly change the situation and tasks of population development, but also have a great and far-reaching impact on social and economic development.

(1) The turning point of labor force changing trend

In the past period, China has experienced the rapid growth of labor force. The unlimited supply of labor force was an important condition for China's rapid economic development, and also an important basis for China's economic comparative advantage. After entering the 21st century, the supply of labor force has changed greatly. The first is the emergence of "Lewis turning point": the "shortage of migrant workers" in 2003 marks the end of China's era of unlimited supply of labor. Secondly, the number of working age population began to decrease: in 2013, the number of working age population (16-64 years old) decreased by 1.6 million compared with the previous year, marking the arrival of the era of potential reduction of labor resources in China. By 2017, the working age population had decreased by 5.78 million. According to the forecast of the United Nations, China's working age population will continue to decrease rapidly in a long period in the future, and will decrease by 200 million by 2050. The shift of labor force to negative growth is a major variable for China's economy, which not only brings structural changes to the supply-demand relationship of the labor market, but also puts forward urgent requirements for the reform of various related systems.

(2) The turning point of the changing trend of population dependency ratio

The turning point of the change of dependency ratio appeared in 2011, which was 34.4% higher than the previous year's 34.2%, thus ending the decline process that lasted for more than 30 years. The increase of dependency ratio means the decrease of population productivity and the negative marginal population dividend. In particular, we need to pay attention to two situations of the increase of the dependency ratio, one is the increase of the total dependency ratio led by the child dependency ratio, and the other is the increase of the total dependency ratio led by the elderly dependency ratio. In other words, the same level of dependency ratio, but the internal structure is different. One structure is to bear the majority of children, the other is to bear the majority of the elderly. For example, in 2032, the dependency ratio of China's population will rise to about 51%, which is equivalent to the level in 1994. However, in 1994, the dependency ratio of children accounted for 83.4%, while in 2032, the dependency ratio of the elderly accounted for 56%. The social and economic implications of the two cases are quite different. The former is investment in future productivity, while the latter is pure consumption. For public expenditure, the meaning of these two burdens is totally different. In the future, China's dependency ratio will change in two dimensions: level and structure. In the level dimension, it will rise for about 40 years. In the structure dimension, it will change from the child dependency ratio structure to the elderly dependency ratio structure. The change of these two dimensions will weaken the productivity of population.

(3) The shift of fertility policy and the recovery of fertility rate

For China, whose fertility rate is changing rapidly, if the low fertility rate can not be reversed soon, it will face a more serious situation than other countries. In October 2015, the Central Committee of the Communist Party of China decided to 'fully implement the policy that one couple can have two children'. After the implementation of the policy, although the increase of fertility rate is not satisfactory, it also shows the positive response of fertility rate to the new fertility policy. According to the calculation and analysis of the national population change sampling survey data, the National Bureau of statistics shows that in 2016, the number of two children increased significantly, which is significantly higher than the average level of the 12th Five Year Plan period. In 2017, the number of two children further increased to 8.83 million, an increase of 1.62 million compared with 2016. The proportion of two children in the total birth population reached 51.2%, an increase of 11 percentage points compared with 2016. Among all the babies born, the proportion of two children increased significantly and exceeded 50%. According to World Bank estimates, China's total fertility rate has been below 1.6 since 1996, until it rebounded to 1.62 in 2013, which was 1.62 in 2016. If this trend continues, China's fertility rate will rise to a relatively safe level.

(4) Transformation of the dynamic mechanism of aging

The aging process is not only driven by one force, because it is measured by the proportion of the elderly population in the total population, and the aging is the result of the relative change of the elderly population and other age groups. Therefore, there are three forces that will promote the aging. The first is that the decline of fertility will lead to the decrease of the birth population. At this time, even if the growth of the elderly population is slow or even no growth, the proportion of the elderly population will increase; the second is the growth of the elderly population; the third is longevity, that is, the elderly live at a higher age. Determined by the internal mechanism and historical logic of population change, the aging process of a population group is pushed forward by different forces, or in other words, the leading forces to promote aging are not the same in different stages of aging development. Therefore, the aging process can be divided into three stages: early stage, middle stage and late stage. In the early stage of aging, the leading force to promote aging is the decline of fertility, the leading force in the middle stage is the growth of the elderly population, and the leading force in the later stage is longevity. By about 2040, China will enter the late stage of aging, that is, the aging stage with longevity as the leading force.

(5) Urbanization has entered the middle and later stage of development

According to international experience, the process of population urbanization can be divided into three stages: the early stage before reaching 50%, the middle stage from 50% to 70%, and the later stage from 70% to 80%. When the level of urbanization reaches 80%, it means the completion of urbanization. China's population urbanization process started in 1978 and accelerated from 2000 to 2017, with a total increase of 40 percentage points. According to the development speed from 2000 to 2017, the population urbanization level in 2018 can reach 60%. This marks that China's population urbanization process has entered the second half of the medium-term development stage. According to the prediction of the United Nations, the medium-term development stage will end in 2030, when the population urbanization level will be 70%; from 2031 to the later development stage, it will reach 80% in 2050, which means that China's population urbanization process will take about 30 years to end.