(Part 7)

Japan’s fertility rate started declining 50 years ago. It is possible that the circumstances the Land of the Rising Sun faced over the last half a century may be quite different from what we are facing now, thereby limiting the possible lessons we can learn from its demographic crisis today.

In contrast, the total population of China just started to decline two years ago, in 2022, by 850,000 people, falling to a level of 1,411,750 billion, the first decline in 60 years. As reported by Eleanor Olcott and Sun Yu in the Financial Times, the decline in birth rates in China has roots in the one-child policy imposed by the Communist government led by the late Mao Zedong, which limited the number of children a couple could have to below the replacement level of 2.1 babies per fertile woman. That period of population control under a dictatorial communist regime was notorious for serious human rights violations involving forced abortions. It also led to a huge problem of gender imbalance because the preference for male children resulted in the abortion of millions of female children. According to the US census bureau, the ratio of boys to girls at birth peaked at 118 to 100 in 2005.

After a new regime was introduced under the leadership of Deng Xiaoping, there was the realization of the terrible mistake made to limit births. So, in 2016, the Chinese authorities scrapped the one-child policy, replacing it with a two-child limit and, much later, to three children and even more. Unfortunately, as was in the case of other countries that realized much earlier their mistake in introducing population control policies, the number of births has fallen every year since 2016.

Yi Fuxian, a demographer at the University of Wisconsin-Madison, estimated that China’s population actually started to fall in 2018 but that the drop was obscured by “faulty demographic data.” Yi stressed that China is facing a demographic crisis that far exceeds the imagination of Chinese authorities and the international community.

Some China-watchers prefer to whistle in the dark by claiming that China can overcome this demographic crisis by turning to automation and other labor-saving technologies. Analysts, however, are largely in agreement that the country’s social welfare and medical infrastructure are ill-prepared for an ageing population.

The real problem is not the absolute size of the population. In the worst-case scenario, the Chinese population will fall to 1.31 billion by 2050 and 767 million by the end of the century. Even with such a precipitous decline, China will still have the second largest population in the world, after India. The real problem is not the absolute number of people.

As Elon Musk never tires of repeating, the real bomb today is the rapid ageing of the population. He just shocked the business world by tweeting that “Singapore will become extinct!” Just imagine a population of more than 700 million people, 40-50% of whom are over 65 years old. Social security systems will collapse since there will be too few young workers contributing to the system. Even more problematic is that there will be very few young workers who can take care physically of their ageing parents and relatives. In this regard, China will have no alternative but to turn to countries like Vietnam, Indonesia, and the Philippines (the VIP) who are still enjoying their respective demographic dividends, in the same way that Japan, Singapore, and South Korea are at present highly dependent on immigrant workers for their healthcare, tourism, and other still labor-intensive service sectors.

One important lesson we can draw from the Chinese demographic crisis is that once a contraceptive mentality has been drummed into the mindset of the population, especially among the women, even deeply held cultural practices may no longer work to reverse it. After more than 30 years of the one-child policy promoted by the Government, later reinforced by a materialistic or consumerist lifestyle, even certain possible counteracting cultural practices may be rendered ineffective in convincing couples to have children.

This was recently demonstrated at the beginning of 2024 — the Year of the Dragon for the Chinese, a year which has historically produced a surge of births in China and other countries in East Asia as potential parents try to time the births of their offspring with an auspicious zodiac sign. Instead, the population continued to decline last year, characterized by a gloomy outlook, an ageing society, and the lingering adverse effects on health and the economy of the coronavirus pandemic. The dragon babies, considered lucky and traditionally translating into a jump in births every 12 years, were nowhere to be seen in China last year.

Wang Feng, an expert on Chinese demography at the University of California, referred to a widespread economic pessimism that is a strong counterforce for improving the birth rate in China. It is increasingly evident that policymakers have limited tools to encourage Chinese women to give birth. Even when authorities loosened the one-child policy in 2016, the number of births has fallen every year since, and incentive schemes for new parents have largely failed to boost the birth rate. The lesson for Philippine policy makers is clear: let us abandon all state-sponsored measures to convince married couples to have fewer children.

Another social problem related to a demographic crisis we have to avoid is what the Japanese call hikikomori, a psychological condition consisting of feelings of failure and unbearable social pressure in young adulthood. As described by Gideon Rachman in his column “Global Affairs” in the Financial Times (Aug. 22, 2023), China — like Japan and South Korea — has a hyper-competitive exam-driven education system. As opportunities narrow, more young people are tempted to opt out of the rat race. In Japan, a recent study revealed that 1.5 million people, or more than 1% of the adult population, have withdrawn from society altogether and almost never leave their homes. Something similar is already happening in China, but at a much lower level of income and wealth than Japan.

As China wrestles with a slowing economy (from double digit GDP growth rates of 12% or more in the first decade of this century to 4-5% today), coupled with youth unemployment of more than 20%, a growing number of young people are also giving up on the rat race for a diminishing number of rewarding jobs and instead opting to “lie flat.” China’s demographic crisis could get worse, since young people who cannot find jobs or afford a flat are even less likely to start a family. In an effort to ease the pressure on Chinese youngsters and to reduce the cost of raising children, President Xi Jinping severely restricted the lucrative private tutoring industry. This, however, had the perverse effect of damaging one of the largest sources of employment for young graduates.

There is one common comment among those who have analyzed the roots of the demographic crisis now being faced by China.

As Yuan Yang wrote in her column in the Financial Times (Jan. 21-22, 2023), demographers opine that the decline in the Chinese population, although accelerated by the one-child policy, would have happened anyway, without the brutality and forced abortions, due to urbanization and increases in income. In her words, “In a post-agrarian China, one no longer needs to have children in order to have hands for the harvest. Financial risk-pooling through a national pension fund reduces the need to see children as old-age investments. Instead, perhaps we can see them as children. Maybe we can see women as humans, rather than incubators of future workers.” Touche.

Countries can avoid extinction if their leaders start promoting the basic truths about the true nature of marital love, marriage, and the family.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia