POINT OF VIEW/ Keiichiro Oizumi: China’s regional demographic disparity spreading

August 31, 2012

JAPAN RESEARCH INSTITUTE

The results of China’s 2010 population census have been released, showing the overall population continues to grow. However, the population of some regions has declined and regional disparity, such as labor distribution and population aging, is growing.

Population censuses are carried out in China every 10 years, with the latest census, conducted on Nov. 1, 2010, the sixth.

In recent years, the effects of demographic transition on the economy, such as the falling birthrate resulting from China’s one-child policy, the increased numbers of agricultural laborers migrating to urban areas and the aging of the population, have begun to attract attention.

The census is an important source of information in confirming these changes.

China’s population stood at 1.33 billion in 2010, up 90 million from 1.24 billion in 2000.

This is a big increase, but China’s average population growth rate over the last decade has been 0.7 percent per annum, well below the world average of 1.2 percent. This has been due to the low birthrate resulting from China’s one-child policy.

According to the medium variant of U.N. population prospects, China’s population will begin to decline from 2027.

China’s 2010 population pyramid shows that, while there is a huge 20- to 45-year-old group, the population aged 14 and under is extremely small. The total fertility rate for 2010 has not been published, but it is very likely below 1.5.

The 12th Five-Year Plan emphasizes a switch in the country’s socioeconomic structure apparently because economic growth that counts on leveraging a young labor force is thought to be difficult in the future. The plan may be said to be in line with demographic transition.

In addition, the aging ratio, or the percentage of the population aged 65 or older, increased from 7.1 percent of the total in 2000 to 8.9 percent in 2010.

When the population bulge shown in the population pyramid begins to exceed 65, the aging ratio will move rapidly upward.

According to U.N. population prospects, China’s aging ratio is expected to rise to 12.6 percent in 2020 and 23.3 percent in 2040.

At China’s first “Strategy Seminar on Coping with the Aging Population,” held in Beijing on July 1, He Ping, director of the Social Security Institute of the Ministry of Human Resources and Social Security, said the retirement age for both men and women would need to be raised to 65 by 2045 to lessen the burden of an aging population.

Currently, the retirement age is 60 for men and 55 for women.

With China being so large geographically, there are different population trends in each region.

A comparison of the census figures for 2000 and 2010 shows that the region in which the population has increased the most was Guangdong province, with a jump of 19.1 million to 104.3 million in 2010.

In second place was Zhejiang province with an increase of 8.5 million to 54.4 million, followed by Shanghai with a rise of 6.6 million to 23.0 million, and Beijing with an increase of 6.0 million to 19.6 million.

These regions with large population increases were already areas of high income levels, and the main reason behind their population increases has been labor migration from other regions.

For example, in Guangdong province, the number of people registered as residents of other regions was 21.5 million, accounting for 20 percent of the province’s population.

In addition, the ratio of production-age population, or those between 15 and 64 years old, is high at 82.7 percent in Shanghai, 81.7 percent in Beijing and 81.3 percent in Tianjin.

In contrast, the populations have decreased in four regions.

The population decrease was most noticeable in Hubei province, where the population fell by 2.3 million. The population declined by 1.9 million in Sichuan province, 1.7 million in Chongqing and 500,000 in Guizhou province.

Of Hubei-registered residents, 5.9 million live outside the province, with the bulk of them, 2.3 million, in Guangdong province, indicating a strong trend of migration from Hubei to Guangdong in search of work.

In Japan, the population decline has been identified as a factor hindering economic growth. It should be noted that regions with a level of population decline that could hinder growth have appeared in China.

The per capita GDP in each of these four regions is below the national average.

The ratio of production-age population is also low in these four regions, with the exception of 77.0 percent in Hubei province. The ratio is 72.1 percent in Sichuan province, 71.3 percent in Chongqing and 66.0 percent in Guizhou province.

The figures show that population shifts among regions have resulted in disparity in labor distribution.

Domestic population shifts have also affected the aging of the population in different regions.

In 2000, Shanghai had the highest aging ratio of 11.5 percent, with Zhejiang province second at 8.9 percent and Jiangsu province third at 8.8 percent. They were followed by Beijing, Tianjin, Shandong province and other coastal regions with high income levels.

In 2010, however, Chongqing was in first place with 11.7 percent, followed by Sichuan province (11.0 percent), Jiangsu province (10.9 percent), Liaoning province (10.3 percent) and Anhui province (10.2 percent). With the exception of Jiangsu province, these are all regions with low income levels.

Meanwhile, the aging ratio in Shanghai was 10.1 percent in 2010, putting it in sixth place, but the figure is below the 11.5 percent recorded in 2000.

Both Beijing and Tianjin have seen their aging ratios rise by no more than 0.1-0.2 percentage point during the last decade.

Further, within each region, the gap in the aging ratios is growing between urban areas and rural areas.

In 2000, the aging ratio was 6.4 percent in urban areas and 7.5 percent in rural areas, with a differential of 1.1 percentage points.

In 2010, however, the aging ratio in urban areas rose to 7.8 percent and the aging ratio in rural areas to 10.1 percent, with the differential expanding to 2.3 percentage points.

The trend is most pronounced in regions with low incomes. The differential expanded from 0.5 percentage point to 5.2 percentage points in Chongqing and from 1.0 percentage point to 3.3 percentage points in Sichuan province.

The aging ratios in rural areas in Chongqing and Sichuan province are high at 14.5 percent and 12.3 percent, respectively.

Chinese are concerned about the emergence of the “wei fu xian lao” (growing old before getting rich) phenomenon, and this phenomenon is beginning to manifest itself in rural communities.

In China, from the perspective of correcting wealth disparity, there are growing calls for a review of the household registration system that strictly separates urban and rural households.

However, it is clear that a review of the system would result in an increase in migration among the younger generation.

It needs to be noted that the result of this would be that differences in the population makeup between regions, and between urban and rural areas, would become more pronounced, and that regional economic disparity would likely widen.

As to what kind of stance can be expected with regard to population policies, such as the one-child policy and the household registration system, all eyes are on the Communist Party’s National Congress, scheduled for this autumn.

* * *

Keiichiro Oizumi is a senior economist at the economics department of the Japan Research Institute.

This report was published in the August 2012 edition of Asia Monthly, an English-language publication of the institute, and was edited by The Asahi Shimbun. The original report is available at (http://www.jri.co.jp/MediaLibrary/file/english/periodical/asia/2012/08/contents.pdf).

JAPAN RESEARCH INSTITUTE
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