China's debate over a shrinking birth rate highlights growth concerns

This file picture taken on December 15, 2016, shows nurses massaging babies at an infant care centre in Yongquan, Chongqing municipality, in southwest China. China's population shrank last year for the first time in recent decades, researchers said J
This file picture taken on December 15, 2016, shows nurses massaging babies at an infant care centre in Yongquan, Chongqing municipality, in southwest China. China's population shrank last year for the first time in recent decades, researchers said January 2019, warning that this signals a "demographic crisis" that puts pressure on the country's slowing economy.PHOTO: AFP

BEIJING (BLOOMBERG) - A top Chinese research institution projected the population could start shrinking as soon as 2027 - three years earlier than expected - underscoring growth concerns in the world's second-largest economy.

A report by the state-run Chinese Academy of Social Sciences (CASS) said the country's population would start declining within eight years if the birth rate held steady at 1.6 children per woman. The population - at 1.39 billion in 2017, and the world's largest - could fall to 1.172 billion by 2065, according to the report released on Thursday (Jan 3).

The estimate was one of a flurry of alarming demographic projections spurring debate about the impact of China's restrictive birth limits on the country's long-term growth prospects. The China Times newspaper cited two demographers last week saying that the country's total of number of births probably fell below 15 million last year - a figure that would speed the population drop beyond even the updated CASS projections.

The forecasts were circulated on social-media platforms including Weibo, leading users to question if policymakers had been too optimistic in assuming a baby boom would follow China's 2016 policy change allowing parents to have as many as two children, instead of one.

China is slated to release official birth estimates for 2018 on Jan 21.

In August, China's parliament removed "family planning" policies from the latest draft of a revised civil code slated for adoption in 2020, a signal population control measures would eventually be eliminated.

The State Council, China's Cabinet, has commissioned research on the repercussions of ending the roughly four-decade-old policy and intends to enact the change nationwide, Bloomberg reported in May, citing people familiar with the matter.

"The two-child policy fell short of expectations, and the effect of accumulated fertility desires has faded," China Evergrande Group's chief economist Ren Zeping said on his official WeChat account on Tuesday, calling for an immediate end of birth limits to boost the fertility rate.

A figure of 15 million births would be the third-lowest total since the People's Republic of China was founded in 1949, Mr He Yafu, one of the demographers cited by China Times, told Bloomberg News. It would exceed only 1960 and 1961, when the country was hit by natural disasters and famine.

On Thursday, the Southern Metropolis Daily newspaper reported that new births last year were expected to range from 15 million to 16 million, the lowest since 2011, citing an official researcher affiliated with the National Health Commission - which sets China's population policies. The National Health Commission didn't reply to a fax seeking comment.

Demographic trends are weighing on President Xi Jinping's efforts to develop China's economy, driving up pension and healthcare costs and sending foreign companies looking elsewhere for labour. China's State Council projected in 2017 that about one-quarter of its population would be aged 60 or older by 2030 - compared with 13 per cent in 2010.

"Is China the next Japan?" Weibo user Shengyin2011Gongguan asked. "Three years after the two-child policy, we still remember some experts once foresaw a baby boom after the policy and even suggested making preparations to curb excessive population growth."