China’s working-age population actually declined in 2012, a trend that concerns the government and that could have a serious longer-term impact on the world’s second largest economy, according to the Financial Times.
China’s population aged 15 to 59 was estimated at 937.27 million at the end of December — a drop of 3.45 million from 2011.
Ma Jiantang, head of China’s National Bureau of Statistics, called the drop “worrying.”
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While the decline was less than 1 percent, it reversed a long history of growth, thus is being treated as profound for the nation, the Times reported.
“In 2012 for the first time we saw a drop in the population of people of working age. … We should pay great attention to this fact,” Ma said.
Birth rates usually decline naturally in societies where the population is growing wealthier. But the Times said that trend has been distorted in China by the country’s one-child population control policy.
“Most projections … estimated that the decline in the working-age population would start around the middle of this decade,” said Frederic Neumann, co-head of economics at HSBC. “But [the numbers] show it has already happened, which suggests the decline over the next few decades will be faster than expected.”
China’s 2012 economic growth rate of 7.8 percent, while enviable in most countries, still marked its slowest annual pace since 1999.
Ma suggested the government was satisfied with the lower growth rate, particularly since it was not accompanied by high unemployment, the Times reported.
“China’s economy cannot and indeed should not continue to grow at those very high rates,” he said.
Vincent Chan, an economist at Credit Suisse, predicted China’s economy is destined to look more like that of more developed nations. “Wage increases, more automation and production of better-quality products are all likely to become stronger structural trends in China,” he told the Times.
China’s Xinhua news agency said the government estimates economic growth in China would be about 8.5 percent this year, with domestic demand rather than exports being the driving force for expansion.
Harvard economist Kenneth Rogoff predicts that public dissatisfaction with rising inequality in the country as well as a “fragile” financial system and diminished supply of labor make it difficult for China “to avoid a rough patch indefinitely,” according to The Wall Street Journal.
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