China's shrinking working-age population should not cause alarm, experts said, after figures released recently by the National Bureau of Statistics showed declines in the number of workers over seven consecutive years.

Both the absolute number and the relative proportion of the working-age population－those 16 to 59 years of age－have been dropping. Last year there were 897 million people in China in that age group, down by 26 million from the peak in 2011.

It is generally believed that China's economic juggernaut over several decades was fueled by an abundant supply of labor generated by the baby boom of the 1950s.

Those babies matured into adults in the 1980s, coinciding with a series of economic reforms that created plenty of employment opportunities, and with the enforcement of the family planning policy, which reduced the child-rearing burden for workers, said He Dan, director of the China Population and Development Research Center.

Those factors have gradually lost traction. The one-child limit was scrapped in recent years as the labor pool appeared to be shrinking.

Demographers focused on a potential shortage of working-age people, which could drag down economic growth in the coming decades.

Anxiety was heightened by bleak projections from the Ministry of Human Resources and Social Security and the United Nations, both of which forecast that the decline will persist, with the working age population dropping to around 700 million by 2050.

But some demographers and economists said the prevailing anxiety over the shrinking workforce is exaggerated.

Zhai Zhenwu, president of the China Population Association, said the sheer volume of the workforce in China is equivalent to that of all developed countries combined, and "currently, no labor shortage is in sight".

"Workforce declines can be offset with improved productivity," he said. "China's economy is mainly driven by labor-intensive industries, rather than the high-tech sector. Through science and technological innovation, the country can scale back its dependence on workforce volume.

Future productivity increases will be made possible through greater numbers of well-educated college graduates and sufficiently trained technicians entering the labor market each year, said Ning Jizhe, head of the National Bureau of Statistics.

"The number of those having received higher education or technical training has surpassed 170 million, and we see more than 8 million new college graduates each year," Ning said at a news conference in July. "The higher proportion of this talent in the labor market will play a greater role in upgrading the country's industry and maintaining steady growth."

China saw about 8.2 million students graduate from college last year, compared with 6.3 million in 2010.

But Ning also acknowledged an inadequate supply of technicians, skilled workers and talent to supply emerging industries, which he described as "structural issues afflicting the employment market in both coastal regions and inland areas in central and western parts of China".

According to a tentative report, or green paper, on population and labor in China published by the Chinese Academy of Social Sciences in January, a diminishing number of migrant workers from rural areas in 2003 was an initial sign of labor strain.

The downward trajectory gradually affected a wider range of labor-intensive sectors, such as catering and housekeeping services, as well as the conventional agricultural industry, said Li Tongping, a population economist with China University of Geosciences in Wuhan, Hubei province.

"It is vital to keep calm when confronted with the ongoing workforce shift," he said. "The heightened anxiety is likely to originate from the unusually rapid pace of change taking place in China."

Workforce volume is closely linked to fertility rates and the elderly population, he said.

The proportion of China's population aged 60 and above will expand to 20 percent of the total by 2025, according to estimates by the United Nations Population Fund.

China completed its transition from high fertility and high death rates to low levels of both in 40 years, while in developed economies it took about 100 years, leading population researchers said.

Though the speed and scale of China's population shift and the subsequent changes in workforce volume are unprecedented, Li said, the change still fits the universal trajectory of population development.

Babatunde Ahonsi, United Nations Population Fund representative in China, said the linchpin of a country's economy is labor productivity rather than the size of its workforce.

"With well-coordinated actions from the government, the private sector and civil organizations, China will continue to be a key driver of sustainable development," he said.

He said he appreciated China's efforts in boosting job skills, improving healthcare and pension systems and pushing for an innovation-driven economy.

More actions are needed though, he said, starting with a gradual increase in the retirement age and an equal retirement age for men and women, along with concerted efforts to develop the "silver economy" that caters to the healthcare, learning, mobility, leisure and financial service demands of senior citizens. The retirement age for Chinese women ranges from 50 to 55, and most men retire at about 60.

"Second, measures should be taken to support members of the younger generation who choose to have more children," Ahonsi added.

He suggested policymakers consider introducing weighted tax reductions, child-care subsidies, and affordable quality care for children and the elderly so as to empower women and promote equality in the sharing of household work between men and women.

Related

Go to Forum >>0 Comment(s)