THE RISK REPORT BY IAN BREMMER
WHEN CHINA AN-nounced in January that its population fell in 2022 for the first time since the early 1960s, the search for solutions to a growing demographic crisis took on new urgency. Beijing knew this day was coming and that an aging population inside a country with a social safety net that remains a work in progress will force new thinking. Failure will stunt the country’s economic growth and create social pressures by pushing millions of older people into poverty.
That’s the backdrop for a decision by authorities in Sichuan province, with a population of more than 80 million, to allow unmarried citizens to register their children and receive state health benefits. So far, only two provinces have taken this road. The municipal government of Shanghai tried this for a few weeks in 2021 before reversing course but we can expect more Chinese provinces and cities to experiment with similar steps.
YET, CHINESE OFFICIALS should know these reforms won’t solve China’s demographic dilemma. After all, similar plans in Japan and South Korea, which face the same problems, haven’t had any impact on their own declining birth rates. In all three countries, low salaries, long work hours, and the rising costs of child rearing make large families unaffordable.
In Japan, the population began to shrink in 2005. Nearly 29% of Japanese are now 65 or older, and the country’s population is forecast to fall from 125 million now to 87 million by 2060. Prime Minister Fumio Kishida warned recently that a low birth rate puts Japan “on the brink of being unable to maintain social functions.” His government will open a new state agency to oversee childcare policies, but it’s hard to see why that plan can do more than the Minister already responsible for this problem.
Though South Korea’s population didn’t begin shrinking until 2020, its outlook is even darker than Japan’s. According to the OECD, “assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population.” South Korea’s fertility rate now stands at just 0.8, and the share of its population ages 65 and older is expected to overtake that of Japan by 2045 and w
