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Wednesday, 8 September 2021, 11:00 HKT/SGT
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Source: Jammu and Kashmir - Centre for Peace and Justice (JK-CPJ)
Chinese Census Results point to Socioeconomic Challenges that will Impact the World

Jammu and Kashmir, India. Sept 8, 2021 - The Olympics have always been the world's major sporting event and history is witness that there have been many eye-openers' incidents for nations to ponder on; Tokyo Olympics is not much different. For ages, China has been a closed society and nothing much was known about the internal issues and dynamics of the society. Things are changing with the advent of technology and issues related to Chinese society are coming to the front. The Chinese decline in population and insecurity associated with it is one of the issues raising the alarm bells in Beijing. The backlash that came after an adoptive Chinese athlete (MacNeil) won an Olympic gold medal for Canada worsened the situation for the CCP as it was seen as a direct impact of China's One-Child Policy. Society is experiencing an inverted population Pyramid with fewer young supporting a growing older population. With the Gold going to Canada for butterfly swimming, style experts are discussing whether the butterfly of progress has flown from China.

The ageing population of China is a concern on the economic front as well but its impact is not yet clear. From one lens, China could face Japanese Style decline as has been discussed in detail in an article published by the Mercator Institute for Chinese Studies, 'Ageing China facing Japanese-style lost decade' by Lauren Johnston.

"An ageing population poses many economic challenges: rising labour scarcity in sectors and regions where labour once was bountiful; fiscal and corporate resources increasingly directed towards pensions; more human capital directed toward caring for the old. In other words, national resources are diverted away from more productive economic endeavours" - Lauren Johnston, economist with Adelaide University. (merics.org/en/analysis/ageing-china-facing-japanese-style-lost-decade)


On the other hand, China's long-term preparations to shift from labor quantity to labor quality and technology as its working-age population falls, may see it cope better with population ageing than other economies home to ageing populations. There may, that is, be a long-run upside to getting old before rich, at least for economies that have had the right policies in place over time. Time will tell.

The latest census in China broadly confirms the trends that have been reported and broadly expected during the last decade: it gives a picture of slowing population growth, an ageing population, but also of a rapid higher education expansion and a high level of mobility and continuing urbanization. Almost two-thirds of the population (64%) now live in urban areas, up from half in 2010. Overall, the reported trends appear credible despite the delay in their reporting. However, more detailed results are still to be published and these will provide a more nuanced picture of the latest population trends, also by regions and for specific age and population groups.

China has enjoyed the unprecedented growth of the economy mainly due to the availability of cheap labor in the country owing to the large proportion of the population being work-capable, however, with the declining population the trend is changing. While the number of children is unlikely to increase much in the future, the share of the elderly is now growing rapidly and that means that population structure will no longer provide an extra advantage for economic growth. But also, structural factors, including a decline of heavy and dirty industries (especially in the North-East) and the fact that China has become a middle-income country mean that economic growth in China is likely to slow down substantially shortly. The problems related to noncontributing population or floating population is adding to the trouble of economic slow-down.

We are witnessing the rise in labor wages and production cost is already going up taking their sweatshop business to Africa etc. With a further declining young population and its impact on Low-cost production which has been the main strength of Chinese economic growth, China has to get ready for the tough decades ahead. The Cost associated with the relocation of industries to places wherein cheap labor is available and outsourcing the production is huge. Previously China was the base of all industrial growth and availed all the benefits that came along to its advantage, now the benefits are to be shared. China's BRI (Belt and Road initiative) is among one of the major outcomes of the declining population and the cost incurred for the increased connectivity to relocate the industry is substantially huge.

China is investing hugely in the automation sector which can also be viewed as a direct outcome of increased labor wages. The country is trying to strike a balance between the consistent economic growth and the labor force available by implementing automation where ever it can. However, some industries form a huge part of the Chinese economy such as the shoe industry which has already seen increased production in other countries as Bangladesh, Cambodia, Vietnam, etc., thus drawing from the share of China. The implications of the declining population are many in addition to the psychological impact it will have on China; being no longer number 1 at the number game and with India taking over as the world's largest market China has to look into the future with a more realistic scope.

China facing demographic headwinds. It's a big shift from a generation ago. China's working-age population is shrinking; its population of elderly people is exploding. And the extended family is imploding. When one looks at these factors, it will be difficult for the government to maintain rapid economic growth in the future. The Chinese government realizes it has a few options to compensate. Attempting to improve educational quality. Improving urbanization. But those are limited tools. We can be fairly confident that the era of heroic economic growth is over in China. - Dr Nicholas Eberstadt, Henry Wendt Chair of Political Economy, American Enterprise Institute (AEI)


The increased crime rates in Asia particularly the cases of human trafficking are a grave concern for the world. The problem stems from the skewed Sex ratio of the Chinese population; the Chinese population has to deal with the long-term consequences of distorted sex ratios, which are also unequally distributed by regions and will persist for many decades to come. These range from tens of millions of males who will not be able to find a female partner and marry and are more likely to suffer from loneliness, isolation, and lack of care at an older age, to a rise in trafficking, up to a lower number of births in the future (as males are overrepresented in the population of reproductive age). The impact of the skewed sex ratio and reduced fertility rates has been comprehensively studied by Tomas Sobotka of the Vienna Institute of Demography. There have been some reports of human trafficking from BRI beneficiary countries like Pakistan, which is indicative of the prevalent situation in China.

China still has to deal with the long-term consequences of distorted sex-ratios, which are unequally distributed by region and will persist for many decades to come. - Tomas Sobotka, Research Leader, Fertility and Family, and Editor, Vienna Yearbook of Population Research, Vienna Institute of Demography (Austrian Academy of Sciences).

China also faces a problem concerning educated urban women not being able to find upper educated urban men to satiate them. This is leading to an increased population of unmarried men and women in China thus adding to the population-related problems. The families which would otherwise have educated heads as parents are seeing no realization on the ground. The increased matchless singles and desperation of the state are leading to an increased trafficking rate that has been discussed in "The invisible hand in Asia's heirs' race", by Lauren Johnston of Peking University. The study tries to build a realistic picture of College Admissions and the Stability of Marriage, comparing college admissions to the marriage market.

Men are marrying at older ages, increasing the age gaps with their partners, and polyandrous marriages are rising. Given the scale of China's economy, such responses to the absolute gender gap may have global ramifications. - Lauren Johnston, China-focused economist with Adelaide University. www.eastasiaforum.org/2012/11/30/the-invisible-hand-in-asias-heirs-race/

Apart from the economic impacts declining population has a substantial impact on the security and politics of China. PLA is already shrinking, even though they are trying to high tech it has been observed that they don't have enough educated men who can operate the high-tech military instruments. Also, with the wages going up a lot many numbers of men aren't opting for high-risk military jobs. This is going to impact the PLA in the long run despite the technological advancements it has made. China is trying to reverse the damage it caused itself by policies like the One-child Policy by implementing a 3 Child policy and investing largely in the educational sector, but the results will take time and the economic slow-down is expected in near future with increased internal instability.

By Nadir Ali Wani. Director, Center for Peace and Justice, Jammu and Kashmir: Guest Contributor.

Mr Wani is Director, Center for Peace and Justice, a research-based group in Srinagar, the capital of Jammu and Kashmir. He holds a Masters degree in Conflict Studies and International Relations from Jawahar Lal Nehru University in New Delhi, and has an abiding interest in the study of conflicts in South Asia, with a particular interest in the International Politics to do with China, Islam, and Kashmir. His NGO is known as a political think tank, and for youth development in Kashmir. He has no political affiliation.



Topic: Press release summary
Source: Jammu and Kashmir - Centre for Peace and Justice (JK-CPJ)

Sectors: Daily News, ASEAN, Government
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