It’s too soon to panic about China’s shrinking population

Last week Hong Kong welcomed the appointment of a new governor – I beg your pardon, a new Director of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region.

The new man, Zheng Yanxiong, was previously the Head of the Office for Safeguarding National Security of the Central People’s Government in the HKSAR. No great policy changes to be expected, then.

Zheng Yanxiong (right) meeting with Luo Huining. Photo: China’s Liaison Office in Hong Kong.

The occasion was naturally marked by speeches, and these struck a sunny optimistic note. A typical offering from Mr John Lee: “I am sure that Mr Zheng will continue to co-operate with the HKSAR Government in supporting the promotion of Hong Kong’s integration into national development and making greater contribution to the rejuvenation of the Chinese nation.”

This was followed a day or two later by a distressing announcement, which suggested that perhaps the rejuvenation of the Chinese nation was not as inevitable as Messrs Lee and Zheng thought it was: China’s official population had declined.

In terms of numbers this did not appear to be a big deal – an 850,000 reduction in a population of 1.4 billion – but demographers were gloomy. It is not just the absolute number, apparently, but the implication in terms of the size of different age groups. A large population of the elderly supported by a shrinking population of workers is a problem already for Japan and some European countries. But they started from a more prosperous position than we do.

It is apparently almost impossible to reverse a decline in women’s inclination to have babies, which lies at the root of the problem.

Family with one child. Photo: Wikimedia.

The Western media were fascinated. The Associated Press quoted an American academic as saying that the “looming economic crisis will be worse than Japan’s.”

The BBC spoke to Paul Cheung, Singapore’s former chief statistician, who thought China has “plenty of manpower” and “a lot of lead time” to manage the demographic challenge. “They are not in a doomsday scenario right away,” he said, comfortingly..

Reuters quoted demographer Yi Fuxian, who is based in an American university and seems to be the go-to guy for quotes on China’s population figures: “China’s demographic and economic outlook is much bleaker than expected. China will have to adjust its social, economic, defence and foreign policies.”

Reuters is a careful news outlet; it also had an official response: “Kang Yi, head of the national statistics bureau, dismissed concerns about the population decline, telling reporters that ‘overall labour supply still exceeds demand’.”

Beijing correspondents adorned the statistical news with pen portraits of defiantly unpregnant Chinese women and happily childless “Double Income No Kids” couples.

Some of the on-line reporting was less restrained than all this. One financial guru (it is often said that investment advisers are called “gurus” because the word “charlatan” is too long for headline use) said she would give China “two or three years.” She did not make clear whether this was the deadline for the End of Life as We Know It or just the point when China might drop off the menu for international share punters.

Well, I am not sure what to make of all this. The immediate effect, as one commentator put it, was psychological. China will shortly cease to be the most populous country in the world. Losing one of your entries in Guinness World Records is perhaps a minor national humiliation. Indeed if the Indian government had got a census together, we might have discovered that this has already happened. The long run? Anything could still happen.

But there is perhaps a warning here. Countries, like investments, can go down as well as up. A recent example is the UK, which has managed to shoot itself in both feet since the Brexit referendum. Then of course there was the USSR…

Children queue for their turn on a slide on International Children’s Day in Beijing on June 1, 2021. Photo: Noel Celis/AFP.

We would do well to approach the future with some humility and strive, perhaps, for some flexibility. Current developments, welcome or unwelcome, will not continue indefinitely. Change is inevitable and there is no guarantee that we will see it coming. Integration with China looks a good bet now, but is there a Plan B?

Perhaps the demographic trap will turn out to be a false alarm – all those missing workers replaced by microchips, maybe. But something else will come along. It always does. As Michael Oakeshott put it: “In political activity … men sail a boundless and bottomless sea: there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination. The enterprise is to keep afloat on an even keel…”

There is also a telling line on this in one of God’s early works: “I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.”

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