It is necessary to emphasize two points in making judgments about China’s long-
term future. The first is the rapid ageing of the population. Internationally, a soci-
ety is said to have become an “ageing society” when the ratio of the population
above 65 years of age to the total population reaches 7 percent. When this ratio
crosses 14 percent, the society is called an “aged society.” In comparison with
Japan, which is considered to have become an aged society at the fastest pace,
however, China may soon surpass Japan’s record. Shanghai is already approach-
ing Japan in this regard.
In earlier article, depopulation of Chinese rural areas caused by exodus
of the young, we observed that 73 percent of county and county-level cities have
already entered into a depopulation phase. Taking care of the older folks left
behind in depopulated rural areas is therefore emerging as a serious new prob-
lem. Since urbanization has proceeded so rapidly, China as a whole has not yet
prepared itself for tackling this emerging problem.
It also needs to be emphasized that according to the projections, China will
reach a static population stage some time between 2020 and 2023. Many Chinese
scholars on population issues anticipate that the population will stabilize in or
around 2030, at a level of approximately 1.6 billion. However, we think that this
projection involves overestimation.
If we look at the changes in the total fertility rate of Japan and China,
approximately 30 years or so after the total fertility rate falls below the 2.1 line,
the population of a nation begins to decrease. Japan’s total fertility rate fell below
2.1 in 1974, and in 2005 its total population began to decrease. China’s total
fertility rate is now around 1.15, a figure far below Japan’s 1.25 in 2005. China’s
fertility rate seems to have fallen under 2.1 around 1993, although the statistics
are not always accurate. Taking these points into consideration, we think that
China’s population will stabilize sometime between 2021 and 2023, at 1.52 bil-
lion. Thus, China will arrive at the stationary stage of population earlier, unless
the Chinese government changes its “one child policy.”
These two factors, namely rapid aging of the population and cessation of popu-
lation growth, will work to slow China’s economic growth down. One important
policy for avoiding a fall in the economic growth rate in the coming 10 to 15
years is to implement in China’s financial system a drastic change aimed at redis-
tribution of the dividends of the rapid economic growth to the poor and poor
areas. This policy will require a struggle against the current formidable trinity of
local bureaucracy, developers, and state-owned banks.
