Tuesday, March 26, 2019

Autumn in China



Pink Autumn, by Victor Wang (2017) (Wikipedia). China’s demographic crisis is much worse than what official statistics let on.



With its population ageing as a result of longer lifespans and a dwindling number of children, the world's most populous nation decided in 2016 to allow all couples to have a second child, relaxing a tough one-child policy in place since 1978.

But birth rates plummeted for the second consecutive year last year. Policymakers now fret about the impact a long-term decline in births will have on the economy and its strained health and social services. (Stanway 2019)

The above Reuters article appeared two weeks ago. Although China lifted its one-child policy in 2016, its total fertility rate is still declining and now stands at 1.6 children per woman—well below the replacement level of 2.1 children. Delegates to China's parliament are saying that "radical steps are needed."

Are things that bad? No … they're worse. China's fertility rate is much lower than the official figure of 1.6 and probably close to what we see in Taiwan (1.1), in Singapore's Chinese community (1.1), and in Malaysia's Chinese community (1.3). Moreover, it is continuing to decline and will soon fall below the threshold of one child per woman, if it has not already done so. Finally, this very low fertility has lasted long enough to exhaust all population momentum. The population will soon begin to shrink, most likely five years earlier than the officially projected date of 2030. 


The real figures

The official figure of 1.6 children per woman is consistent with estimates by respected international bodies: 1.62 (World Bank, 2016); 1.8 (Population Reference Bureau, 2016); and 1.6 (United Nations, 2011-2015) (Wang 2018). The total fertility rate can also be estimated from data that China collects every year, i.e., the sample surveys taken by the National Bureau of Statistics. Using this source, Mengqiao Wang came up with much lower figures:

[…] far below the 2.1 replacement level, national TFR fluctuated around 1.4 since 2003, before dropping to around 1.2 since 2010 and finally reaching an astoundingly low value of 1.05 in 2015. (Wang 2018)

This pattern of very low fertility is limited to Han Chinese, particularly those in the northeastern provinces of Liaoning, Heilongjiang, and Jilin. In those provinces, the total fertility rate has fallen to 0.75 children per woman, and death rates have already overtaken birth rates:

Population shrinkage was already a fact for the northeastern part of the country, and it remained a question of when but not whether that fact would spread to other areas of the nation (official estimate of population peak at 1.45 billion by 2030 but unofficial estimate of 1.41 billion as earliest as 2025. (Wang 2018)

Why are these figures so much lower than the official figures? The main reason given is that the one-child policy caused widespread underreporting of births: many Chinese were having second children but not reporting them to government statisticians for fear of being penalized. This is seen in the differences between the raw data of the sample surveys and the official estimates of the National Bureau of Statistics. 

The NBS estimates, however, seem to be based on the sample survey data … with an upward adjustment to take underreporting of births into account: "Ironically, the NBS mentioned that the annual total births announced were calculated and inferred from the same sample surveys this study analyzed" (Wang 2018). So we are trapped in a circular argument: the sample surveys must be missing many births because the NBS estimates show a higher birth rate. But the same NBS estimates have been adjusted upwards because so many births are supposedly being missed.

Moreover, if the one-child policy had caused so much underreporting of births, the number of reported births should have increased in 2016, when that policy was scrapped, and that increase should have persisted in subsequent years. That's not what happened. The number of births did rise in 2016 and then fell in 2017 and 2018. The rise was probably due to some parents deciding to have a second child because there were no longer any financial penalties. The "backlog" of potential childbearing has now been cleared, and the fertility rate has returned to its pre-2016 slump.

It should be emphasized that the decline in Chinese fertility is now being driven by the growing number of women who have no children at all. This childlessness cannot be blamed on the one-child policy, and it is questionable, in fact, whether that policy has had much impact on the fertility rate for the past two decades. Total fertility rates have declined to the same very low level among Chinese people in Taiwan, Singapore, and Malaysia—where there has never been a one-child policy.


How bad is it?

Pretty bad. The fertility rate dropped below the replacement level in 1992 and has been at very low levels (1.4 or lower) since 2003. There is very little population momentum left, and an absolute drop in numbers should begin in the mid-2020s. Meanwhile, the total fertility rate may decline even further. In 2018, it was 0.98 in South Korea and 0.75 in northeastern China (Kyu-min and Su-ji 2019; Wang 2018). In all of East Asia, this pattern has only one exception: North Korea, where the rate is 1.98 children per woman (Wikipedia 2019). This is what we call “a failed state.”

One can always say that China has well over a billion people and can afford to shed a few hundred million. The relevant figure, however, is not the total population but rather the number of women who can bear children. That figure is a lot smaller and will continue to shrink. Women of childbearing age are defined (generously) as being 15 to 49 years old. Their numbers peaked at 383 million in 2011 and have been falling each year by 4 to 6 million. If we look at the most fertile age group (20-29), their numbers are expected to fall from 107.7 million in 2016 to around 80 million in 2020 (Wang 2018). 

There is no real precedent for what is happening. In the Western world, the fertility rate has declined over a longer time and has reached very low levels only in some countries, notably those of southern and eastern Europe. Moreover, unlike those countries China is still creating jobs at a high rate. Who will fill those jobs?

I addressed that question in a series of posts I wrote nine years ago. The abundance of jobs and empty housing will suck in immigrants from poorer countries, initially from Southeast Asia and then increasingly from South Asia and Africa. The African influx into Asia will be the big surprise of the 21st century, being especially noticeable in Malaysia and South China.


What can be done?

The first step toward solving a problem is to recognize that it exists. Most problems go unsolved because no one takes that first step. China is starting to move in that direction, but the word "starting" should be stressed. As Wang (2018) notes, there is a recurring tendency by the Chinese bureaucracy to downplay the demographic crisis. In some cases, the relevant data are not published:

Regrettably, such data for 2016 were no longer published in the most recent 2017 yearbook as the official publication mentioned that "In comparison with China Statistical Yearbook 2016, following revisions have been made in this new version in terms of the statistical contents and in editing: Of the chapter "Population", table named Age-specific Fertility Rate of Childbearing Women by Age of Mother and Birth Order is deleted." (China Statistical Yearbook 2017). Reasons were unknown for the deletion of this table, and it was unclear if the deletion would be temporary or permanent, or whether such deletion would continue in future years beyond 2016. (Wang 2018).

With determined effort, very low fertility can be reversed. Israel has gone the farthest in this direction, having achieved replacement fertility even among secular Jews. One must provide not only financial incentives but also cultural and ideological ones. Marriage and family formation must be seen positively. In this, unfortunately, the West is not an example to follow.

Wang (2018) suggests four measures to deal with the demographic crisis:

- Make demographic data fully accessible for debate and discussion.

- Eliminate controls on couples who want to have more than two children.

- Lower the minimum age for marriage, which is currently 22 for men and 20 for women.

- Allow out-of-wedlock births.

The first three measures seem sensible, although the second one would probably have little effect. Such controls are already absent in Taiwan, Singapore, and Malaysia. The last measure is terrible. All things being equal, a single mother will have fewer children than a married mother. Yes, a single mother can eventually marry or remarry, but such marriages tend to be less stable and thus less conducive to future childbearing, largely because the husband is less willing to support children that are not his own.

Of course, not all things are equal. Single mothers tend to be more present-oriented and, thus, more indifferent to the long-term costs of their actions, like those of having children. But what is to be gained by encouraging such people to reproduce? The experience of the West has been that single mothers, and their children, end up being a net cost to society.

In the West, the increase in single motherhood has coincided very closely with the decline in fertility, and both reflect the same underlying problem: people are less willing to commit to a long-term relationship and raise the children it produces. We increasingly live in a culture where the only valid entity is the individual. Everything else—family, community, nation—is illegitimate.


References

Frost, P. (2010a). China and interesting times ... Evo and Proud, February 25

Frost, P. (2010b). China and interesting times. Part II. Evo and Proud, March 4

Frost, P. (2010c). China and interesting times. Part III. Evo and Proud, March 11

Frost, P. (2010d). Has China come to the end of history? Evo and Proud, March 18

Kyu-min, C. and S. Su-ji. (2019). Fertility rate plummets to less than 1 child per woman. National Politics, February 28

Stanway, D. (2019). China lawmakers urge freeing up family planning as birth rates plunge. Reuters, March 12

Wang, M. (2018). For Whom the Bell Tolls: A Retrospective and Predictive Study of Fertility Rates in China (November 8, 2018). Available at SSRN: https://ssrn.com/abstract=3234861

Wikipedia (2019). Demographics of North Korea.

19 comments:

tomR said...

Why not introduce some kind of a Reproductive Draft for women? In which women at draft age would be forced to realize their reproductive duties by the government (analogously to draft age men and their military duties). A non-democratic government like the China govermnent could pull such thing out.

Anonymous said...

For that series of posts my blog was banned in China. Apparently it still is (check out the Great Firewall of China - Comparitech)

I doubt your posts had anything to do with it. I can tell that your blog is banned right now without needing to check a tool, because you're using a blogspot.com domain, and all blogspot.com domains are banned.

If you don't want to be banned in China, use a real domain. The odds are overwhelming that no one with the authority to have you banned will ever notice you.

Sean said...

Economic Spring is demographic Autumn.

Peter Frost said...

TomR,

Why not reproduce the conditions that made the baby boom possible not so long ago? Things like high wages for average working people, a protectionist economic policy, not flooding the labor market, a family-oriented culture … This isn't rocket science.

Anon,

You're right. I was stupid. I checked the Great Firewall with a blog about kittens. Same result. So I've deleted that passage. I assumed there was a connection with those posts because my traffic my China vanished around that time.

Sean,

Economically, China is doing better than what many skeptics have been predicting. That's what bothers me. How will the Chinese business community react when they have to start bidding up the price of labor? Will they react like our own business leaders?

Anonymous said...

Rereading your older posts, I just want to point out that after a government crackdown on illegal immigrants in 2013/14 the number of Africans in Guangzhou has significantly declined.

Phille

Peter Frost said...

Phille,

This is what we've been told, i.e., there was a severe immigration crackdown, and the African community in Guangzhou has greatly decreased in number. Nonetheless, a 2018 study of an African neighbourhood in Guangzhou found little change.

https://www.scribd.com/document/379139677/0117196818761425#fullscreen&from_embed

It would be more accurate to say there has been a leveling off of the numbers of African migrants in Guangzhou. The actual numbers are much larger than the official statistics because most are overstayers with no legal status. Others have married local women and gained permanent residency.

Mirco Romanato said...

@Peter Frost

What you want is not "high wages" but "high wages for well adjusted people".
You are advocating for government economic interventionism in favor of something.

What you really want is taking away the burden of the government from the people willing to have children and raise them properly.
These reforms must be something very general and untargeted because you can not force people to have children or bribe them in having children.
You must allow the people with the will to have children to do so.


My suggestions are:

1) Give people willing to have children tax reduction if they take proper care of their own children education (E.G. they pass some exams every year) unburdening the government from the expenses to do so. In the US and EU it is about $10K/year/child. More you earn, more you can get back in tax refunds. This would allow mothers to stay at home and make more babies if they want.

2) Reduce subsides in favor of poor people. They are poor for a reason, usually not just misfortune. This would allow to lower taxes and make things cheaper for the deserving and working poor.

3) Return the housing market to full free market without any unnecessary regulation. Why people are not making children? Easy. The housing market is fucked up everywhere because of the QE from so many central banks and building/housing regulations. A lot of young people can not afford a decent house to raise children. In many place you get 80 m2 apartments with two tiny bedrooms, one tiny bathroom, one tiny kitchen and a living room. And both partners must work to pay the bills.

4) Slash down requisites to work. A lot of jobs don't need University Degrees of any kind.
If people can work at a younger age maybe they can have the money to make babies when they are still young.

Truth Seeker said...

At least in the US, "acknowledging the problem" by electing a right-winger or a nationalist (Trump) has backfired.
https://www.nytimes.com/2019/03/27/opinion/is-trump-good-for-trump.html
"In response to Trump’s presidency, America has gotten more liberal — despite appearances to the contrary..." The graphs show that white liberals have gotten MORE liberal during Trump's presidency.
We also got #MeToo, i.e. white women hating white men (and sex). And it started as a feminist reaction to Trump in his first year (2017). Be careful what you wish for.

Anonymous said...

Why not reproduce the conditions that made the baby boom possible not so long ago? Things like high wages for average working people, a protectionist economic policy, not flooding the labor market, a family-oriented culture … This isn't rocket science.

Yes, it's not rocket science. But it does clash strongly with the reigning zeitgeist.

To produce the kind of widespread, monogamous baby boom you describe, you essentially have to produce conditions that can only be described as "sexist" in the current zeitgeist. Specifically, you need high wages and income stability for the average man, such that he has the requisite economic and social status to be deemed worthy of long-term pair bonding and reproduction by women. If this relative difference in income and status between men and women doesn't exist, if many or most women in society can earn just as much or more than and have just as much or more status as men, then women will not settle or at least will put off settling during many of their fertile years with the average men in society. Women will live independently during many of their fertile years with money from employment or the state, pursuing short term relationships and hoping to land one of the minority of men who are above the glass ceiling so to speak and do have much more money and status than the rest of society.

Of course this does not entail some sort of brutal oppression of women, but it's considered "sexism" and "patriarchal" all the same in the current environment and is anathema no matter how benign. Difference in economic and social status between the sexes is basically a form of sexual dimorphism in humans, and women prefer mates with greater economic and social status than themselves. Thus to have widespread monogamous fertility booms, you need to promote this sexual dimorphism across society, which means giving men in general greater economic and social status than women. It's not clear how this can be done at this point without some sort of cultural revolution and major upheaval. The minority of wealthy and powerful men benefit from the status quo by centralizing the economic and social status that had been more widely distributed in the past and have access to a wider pool of women and can pursue more polygynous lifestyles than they would otherwise. Women are no longer in danger of starvation from lack of male provisioning and are now able to pursue much higher status mates than they would have in the past. Certainly economics ultimately has a sociobiological basis and the pursuit of more profit, and the promotion of lower wages and feminism is a form of intrasexual competition by wealthy men.

Truth Seeker said...

Let me also add - another way to increase fertility is to ban abortions. But in countries with diverse populations, that will actually result in a faster decline of whites. Data shows that in America whites are least likely to have abortions (maybe because of better access to contraceptives), while nonwhites are most likely.
https://www.guttmacher.org/infographic/2017/abortion-rates-race-and-ethnicity
Peter, can you explain the logic of US Republicans trying to ban abortions? On the surface, this is a counterproductive step in terms of keeping America white. It would be akin to open borders, which Republicans are obviously against. What's the missing link here? It can't be something that goes against white nationalism, because that's what the modern Republican party tacitly represents.

Peter Frost said...

Mirco,

I agree with most of your proposals. There are far too many people in university because a university degree has become a prerequisite for almost any decent job. If employers need smart workers, they should be free to administer IQ tests to prospective employees.

Housing is expensive because of the high rate of immigration. In Canada, housing is a lot cheaper in Quebec than in Ontario, yet Quebec has far more regulations. The immigration lobby gets a lot of support from the housing industry and from homeowners who expect to sell their home for a million dollars when they retire.

Like you, I went through a libertarian phase, largely because of disillusionment with left-wing politics. I then went through a phase of disillusionment with libertarians … and rediscovery of the political left.

Truth Seeker / Anonymous (Are you the same person?)

Romania tried to boost fertility by banning abortions, but the boost was only temporary. Even pro-lifers no longer make that sort of argument.

Why do Republicans try to ban abortions? It's partly ideological inertia. There was a time when the pro-life movement was firmly rooted in social conservatism. It opposed not only abortion on demand but also single parenthood. Today, it praises single mothers because they reject abortion.

There was also a time, not so long ago, when social conservatives didn't have to worry about the ethnic makeup of their country. Even after the 1965 Hart-Cellar, immigration didn't really threaten to bring massive demographic change, and I don't think Ted Kennedy was totally dishonest when he said it wouldn't. What changed things was the steady increase in legal and illegal immigration. The U.S. is now taking in over two million immigrants a year!

Social conservatives don't fully realize what is taking place. To the extent that they do, they haven't begun the painful process of re-examining their beliefs in relation to this rapid demographic change.

tomR said...


@Peter
I don't want to replicate 50s or whatever other period in history. I like modern technology too much to go back in time. Notice that the side effect of this new technology is ongoing human replacement, that virtually guarantees low payments for workforce in the long term. Independantly of demographics or immigration.

An example of replacing human labor - automated containter terminal:
https://www.youtube.com/watch?v=WxXZQ7emHC0

An example of replacement for intellectual job - an AI lawyer's assistant:
http://rossintelligence.com/

Estonia is even considering AI judges, after succesfully replacing some govnermnet workers with AI:
https://www.wired.com/story/can-ai-be-fair-judge-court-estonia-thinks-so/

Even the early beginnings of replacement were a great success:
https://en.wikipedia.org/wiki/Dynamic_Analysis_and_Replanning_Tool

Citation:

DART achieved logistical solutions that surprised many military planners. Introduced in 1991, DART had by 1995 offset the monetary equivalent of all funds DARPA had channeled into AI research for the previous 30 years combined.[2][4]
Directly following its launch, DART solved several logistical nightmares, saving the military millions of dollars.[2] Military planners were aware of the tremendous obstacles facing moving military assets from bases in Europe to prepared bases in Saudi Arabia, in preparation for Desert Storm.[5] DART quickly proved its value by improving upon existing plans of the U.S. military. What surprised many observers was DART's ability to adapt plans rapidly in a crisis environment

Unknown said...

Its divorce, but mainy child support and alimony that are lowering fertility levels. Women are incentivized to leave providers if they can force provider to pay for their degenerate behavior. Then the man can't afford to remarry or have further children unless they are the result of out of wedlock behavior. There is a reason traditional societies gave no legal rights to bastards to the fathers estate. Discourage bastardry or encou encourage western men to be fathers through monetaty incentives. Otherwise there will be no western men.

iffen said...

Why is it a presumption that a steady-state or declining population level is a "bad thing"? I understand why this is true with regards to a capitalist economy, but why otherwise?

painlord2k@gmail.com said...

@iffen
Capitalism has no requirement for a growing, declining or steady state population level.
It can work perfectly in any circumstance. And, anyway, "bad thing" MUST be defined with a "for". "Bad thing for me"? "Bad thing for you"? "Bad thing for my enemy"? "Bad thing for my community"?
The claim is "capitalism is the economic structure where the resources are allocated in the most efficient way POSSIBLE to satisfy the needs and desire of the people as expressed by their actions".

If a capitalist society has a crisis (E.G. an Hurricane) some prices in the Hurricane struck location will increase because of localized increasing demand (nails, hammers, drinkable water, some types of foods, etc.) and this will attract short term entrepreneurs willing to satisfy these demands (for a profit). If they price their goods and services too high, no one will buy and they will not profit. If they are forced (by the government) to price them too low, they will not sell them because there would be no profit.
It could happen the reverse, in some cases, because other intrapreneurs could be more interested in making a long term investment and offer their goods and services to a lower price to their long term buyers to help them back up in shape and business (E.G. A Wall-Mart could be interested in supporting the local community in this emergency because without the local community the investment on the mall is wasted, this help build reputation with the community and the patrons, attract future business, etc.).

There are situations where and when a declining or stationary population could be good (in my opinion). Capitalism, as usual, don't care.

Increasing, declining or steady state of population is, in my opinion, often misunderstood concept. Inside the population there is a continuous change in the share of sub-populations in response of the current incentives or selective pressure.

You could have an increasing population with lowering share of high IQ people (just for example). Or you could have a decreasing population with an increasing share of high IQ people. Or any type of scenario. If you don't define the scenario in enough details there is no sensible conclusion possible.

The cause-effect with capitalism is reversed:
"Capitalism is a prerequisite to a growing population"

Directly because the capitalist society redistribute the resources to the actual workers / creatives / productives; indirectly because the surplus of wealth created flow into less capitalistic societies as they sell unused resources (oil) to or extract wealth from (plunder) the capitalistic ones".


iffen said...

@painlord

While I don’t view capitalism with a deep religious fervor, I do think it is the “best” economic system. I do desire a few more constraints and grindings on the rough edges for the benefit of the less capable. Allow me to restate that it seems to me that capitalism works better when the economy is expanding and that growth is usually intertwined with population expansion. I guess we can study Japan more closely for a better understanding.

My question was for the people who write articles and commentary warning about population decline. They will have to address the “bad thing” questions.

Anonymous said...

You have previously written about hundreds of thousands of Africans living in Guangzhou based on hazy media reports. You seem to backtrack away from the claim.

According to official government figures, the number of Africans in Guangzhou is around 15,000. This is in line with my own observations in Guangzhou. After 4 hours of wandering the airport, I only saw one black person. I went to Xiaobei and saw dozens of blacks and Middle Easterners. However, even in this sole African neighborhood their numbers were not overwhelming relative to the Chinese. Outside of Xiaobei, there was no black presence. According to media reports, there was another African neighborhood, mostly Nigerians, but Nigerians commit high levels of crime so the neighborhood was not tolerated and closed down.

I'm sure there are overstayers but I don't know how long they can evade the police if there are constant passport checks and considering Africans stick out.

OntheSly said...


Any data on the tfr for Chinese living in North America? I would expect it to be below replacement, but our Asian fertility level, overall, isn't anywhere near as low as 1.1 That includes a lot of different groups of Asians, however.

Georgia is an interesting example of a country that has recovered from very low fertility to replacement-level fertility.

painlord2k@gmail.com said...

When the people not reproducing die, the people reproducing thrive.
Always people should look not at large groups demographics but to small sub-groups demographics.
In a large group not replacing itself some sub-group could have an higher fertility compared to the mean and maybe over the level of replacement.