LeveragedBuyout
SENIOR MEMBER
- Joined
- May 16, 2014
- Messages
- 1,958
- Reaction score
- 60
- Country
- Location
This is not just a Chinese problem, but a developed world problem. I want to contrast this article with another one concerning Singapore below. There are no easy solutions, and no one has truly reversed the trend of a declining birthrate, even with the extremely generous incentives that some countries have provided.
Baby Boom or Economy Bust: Stern Warnings About China’s Falling Fertility Rate - Real Time Economics - WSJ
ByWSJ Staff
A baby-themed ad in Taizhou.
Reuters
China needs a baby boom—and badly, researchers say.
“Get married soon and have lots of children.” That’s the advice that 49-year-old Huang Wenzheng gave to college students at a recent forum in Beijing about China’s population and urban policy.
Mr. Huang, one of the most outspoken one-child policy opponents in China, along with other activists and economists, said at the forum that China needs babies more urgently than ever before, and the country’s economic fate depends on whether Beijing can do more to encourage child births.
A shirking population would be detrimental to China’s development, “leading to a drop of China’s national power and even a decline of the civilization,” said Mr. Huang, a co-founder of the website Population and the Future, which promotes the right to have more than one child.
China’s total population continues to grow, but the nation’s working-age population—those between the ages of 16 and 59—has dropped two years in a row, raising concerns about a shrinking labor force and economic growth prospects. The share of the elderly, or those who are more than 65 years old, was 9.7% in 2013, up from 9.4% in 2012, official data showed.
A labor shortage in the short run would be followed by diminishing demand, which in the long run will likely hurt China’s job market and decrease the number of jobs being created, said Mr. Huang, who received a PhD in biostatistics at John Hopkins University.
Such a message isn’t falling on entirely deaf ears: late last year, Beijing moved to ease its decades-long one-child policy by allowing couples to have two children if one spouse is an only child.
But the policy’s impact has been limited. By the end of May, only 271,600 couples had applied for permission to give birth to a second child, with 241,300 couples having been given the permit, Yang Wenzhuang, a director overseeing family planning at the National Health and Family Planning Commission, said at a briefing in July.
Economists and researchers say such small steps are far from enough.
“I’ve been traveling to different parts of the country in recent months to find out exactly what changes are taking place in our society…but wherever I go those who actually qualify [to have a second child] is less than 5%,” said Gu Baochang, a professor at Renmin University. The reason why that figure is so low is in part because many rural residents were already permitted to have a second child. Likewise, China’s rules previously allowed individuals who have no siblings to give birth to a second child, so long as they were married to someone who matched those same conditions.
Faced with a rapidly aging population and declining numbers of the working-age, government officials have strongly hinted that they may need to raise the retirement age.
The ratio between the number of people who are paying into the country’s social insurance pool and those who receive pensions rose to 3.09 in 2012, up from 2.90 in 2003, the latest official data showed.
“When you are 60 years old, who would support you?” the silver-haired Mr. Gu said to an audience of about 400 students, researchers and journalists last week.
Results of the most recent census in 2010 showed that China’s fertility rates, or the number of births per 1,000 women, was 1.18. Large cities and Beijing and Shanghai were even lower, at around 0.7.
As China’s urbanization rate increases, with more farmers moving into the city, the fertility rate will drop further due to higher living costs, said Liang Jianzhang, a professor at Peking University.
To make it worse, China is seeing a rising number of “leftover women,” or middle-aged urban Chinese women who cannot find their Mr. Right—and unlike single women in developed nations, unmarried Chinese woman are not willing to have children, said Mr. Liang, who’s also the founder and chairman of Ctrip.com, Chinese online travel company.
“However you look at it, [the outlook of] China’s fertility rate seems more pessimistic than a lot of other countries,” he said, adding that in 10 to 20 years, China’s population will be greying at a pace even faster than that of a decade ago in Japan, where the elderly currently make up 25% of all residents. An aging population has partly contributed to the “lost decade” of the Japanese economy, economists have said.
More In Population
“Sounds like we are returning to Chairman Mao’s line of thinking…I think we must not make that kind of mistake,” said Chen Zhiwu, a Yale University professor.
Mr. Huang, however, said that even if the government completely scraps the one-child policy, the country’s fertility rate still won’t be ‘normal,’ and will instead continue to stay low.
“It would be disastrous for China,” he said. “No doubt about that.”
-----
And now the article on Singapore.
Singapore: A Geriatric Society | The Diplomat
Image Credit: Singapore via Shutterstock.com
Singapore: A Geriatric Society
Singapore needs more parental leave and a better work-life balance to stem population decline.
By Suhith Sitharthan
September 02, 2014
A falling birthrate and an aging population threaten the social fabric of the city-state of Singapore. In a competitive country, population growth is important to sustain the future development of the economy.
The declining birthrate can be partially explained by an increase in working hours and a lack of work-life balance. If this is not addressed, then the problem will continue, as the declining birthrate will cause fiscal problems for the island. When the increase in the aging population and the decrease in the labor force are factored in, the added fiscal constraints of increased subsidies, taxes and pensions could eventually become a serious burden.
One explanation put forward, in Singapore and elsewhere, is that the decline in the fertility rate is related to the high cost of living, which in Singapore is certainly an issue, but not to the extent that it should be considered the most important factor. The primary reason for the decline in fertility is partly due to an absence of work-life balance, followed by a lack of leisure activities geared towards creating an environment that is conducive for raising children.
To counter these issues, the Ministry of Manpower and the Ministry of Finance, in consultation with the Monetary Authority of Singapore, should create a sustainable model for basic wages that is in line with the current inflation rate, pursuant to a yearly review that should be included in the national budget. Moreover, the government should look into reviewing the current five-and-a-half-day work week, by piloting a cross sectional study of a three-day working week, or by reducing the maximum number of hours per week that people can work.
Some countries are using financial incentives as well as parental leave programs in an attempt to stem the decline in the rate of fertility. For instance, the Lithuanian model of increasing birthrates for parents is to offer a generous period of fully paid parental leave. Germany provides both parents with the option of taking paid leave, with the state defraying the costs. The state pays the parent who stays home with the child 65 percent of that parent’s current net income for a year. If both parents decide to take time off, then the total number of months increases from 12 to 14 months.
Even with such an attractive scheme in place, both Lithuania and Germany still suffer from low fertility rates. Germany at least offsets this somewhat with its immigrant friendly policies; however, merely relying on benefits seems to be doing very little to increase population growth for either country.
Still, having the state defray the opportunity costs of lost income at least helps to engender a vision of a child-friendly society. In Singapore, apart from instituting paid parental leave, it would be beneficial for the government to sponsor social activities that give people a chance to meet others outside of their own network.
At present the total fertility rate is dangerously low (1.3 in 2012), and if it stays at that level, drastic measures will be required to prevent economic stagnation. For instance, the government would need to increase the retirement age to prevent the labor force from shrinking further. It might also choose to invest in new technologies such as robotics, and to find a way to fuse them with labor intensive industries as a means of replacing the labor force. This sort of investment would of course be extremely costly, with a long wait to see any return on investment. As an alternative, then, the government could repeal its current immigration policy, aiming for a massive influx of immigrants to keep the economy going. That, however, could sow social discord.
The problem Singapore faces is that if it chooses to continue the same path, then in a generation or two it could be a society of geriatrics. On the other hand, if it elects to change its current policies then the country will face an uncertain future, as social experiments rarely turn out as expected.
Suhith Sitharthan has worked as a Maritime Security Analyst as well as a Southeast and Northeast Asian research analyst for a top think tank in Australia.
Baby Boom or Economy Bust: Stern Warnings About China’s Falling Fertility Rate - Real Time Economics - WSJ
- September 2, 2014, 6:52 AM ET
ByWSJ Staff
A baby-themed ad in Taizhou.
Reuters
China needs a baby boom—and badly, researchers say.
“Get married soon and have lots of children.” That’s the advice that 49-year-old Huang Wenzheng gave to college students at a recent forum in Beijing about China’s population and urban policy.
Mr. Huang, one of the most outspoken one-child policy opponents in China, along with other activists and economists, said at the forum that China needs babies more urgently than ever before, and the country’s economic fate depends on whether Beijing can do more to encourage child births.
A shirking population would be detrimental to China’s development, “leading to a drop of China’s national power and even a decline of the civilization,” said Mr. Huang, a co-founder of the website Population and the Future, which promotes the right to have more than one child.
China’s total population continues to grow, but the nation’s working-age population—those between the ages of 16 and 59—has dropped two years in a row, raising concerns about a shrinking labor force and economic growth prospects. The share of the elderly, or those who are more than 65 years old, was 9.7% in 2013, up from 9.4% in 2012, official data showed.
A labor shortage in the short run would be followed by diminishing demand, which in the long run will likely hurt China’s job market and decrease the number of jobs being created, said Mr. Huang, who received a PhD in biostatistics at John Hopkins University.
Such a message isn’t falling on entirely deaf ears: late last year, Beijing moved to ease its decades-long one-child policy by allowing couples to have two children if one spouse is an only child.
But the policy’s impact has been limited. By the end of May, only 271,600 couples had applied for permission to give birth to a second child, with 241,300 couples having been given the permit, Yang Wenzhuang, a director overseeing family planning at the National Health and Family Planning Commission, said at a briefing in July.
Economists and researchers say such small steps are far from enough.
“I’ve been traveling to different parts of the country in recent months to find out exactly what changes are taking place in our society…but wherever I go those who actually qualify [to have a second child] is less than 5%,” said Gu Baochang, a professor at Renmin University. The reason why that figure is so low is in part because many rural residents were already permitted to have a second child. Likewise, China’s rules previously allowed individuals who have no siblings to give birth to a second child, so long as they were married to someone who matched those same conditions.
Faced with a rapidly aging population and declining numbers of the working-age, government officials have strongly hinted that they may need to raise the retirement age.
The ratio between the number of people who are paying into the country’s social insurance pool and those who receive pensions rose to 3.09 in 2012, up from 2.90 in 2003, the latest official data showed.
“When you are 60 years old, who would support you?” the silver-haired Mr. Gu said to an audience of about 400 students, researchers and journalists last week.
Results of the most recent census in 2010 showed that China’s fertility rates, or the number of births per 1,000 women, was 1.18. Large cities and Beijing and Shanghai were even lower, at around 0.7.
As China’s urbanization rate increases, with more farmers moving into the city, the fertility rate will drop further due to higher living costs, said Liang Jianzhang, a professor at Peking University.
To make it worse, China is seeing a rising number of “leftover women,” or middle-aged urban Chinese women who cannot find their Mr. Right—and unlike single women in developed nations, unmarried Chinese woman are not willing to have children, said Mr. Liang, who’s also the founder and chairman of Ctrip.com, Chinese online travel company.
“However you look at it, [the outlook of] China’s fertility rate seems more pessimistic than a lot of other countries,” he said, adding that in 10 to 20 years, China’s population will be greying at a pace even faster than that of a decade ago in Japan, where the elderly currently make up 25% of all residents. An aging population has partly contributed to the “lost decade” of the Japanese economy, economists have said.
More In Population
- U.K. Recovery Flattered by Population Growth
- South Korea’s Youth Population Slips Under 10 Million
- Japan Weighs Tax Change to Push Housewives Into Job Market
- Japan’s Population Problem in Five Charts
- Secondary Sources: Congressional Inaction, Population Shifts, Government Workers
“Sounds like we are returning to Chairman Mao’s line of thinking…I think we must not make that kind of mistake,” said Chen Zhiwu, a Yale University professor.
Mr. Huang, however, said that even if the government completely scraps the one-child policy, the country’s fertility rate still won’t be ‘normal,’ and will instead continue to stay low.
“It would be disastrous for China,” he said. “No doubt about that.”
-----
And now the article on Singapore.
Singapore: A Geriatric Society | The Diplomat
Image Credit: Singapore via Shutterstock.com
Singapore: A Geriatric Society
Singapore needs more parental leave and a better work-life balance to stem population decline.
By Suhith Sitharthan
September 02, 2014
A falling birthrate and an aging population threaten the social fabric of the city-state of Singapore. In a competitive country, population growth is important to sustain the future development of the economy.
The declining birthrate can be partially explained by an increase in working hours and a lack of work-life balance. If this is not addressed, then the problem will continue, as the declining birthrate will cause fiscal problems for the island. When the increase in the aging population and the decrease in the labor force are factored in, the added fiscal constraints of increased subsidies, taxes and pensions could eventually become a serious burden.
One explanation put forward, in Singapore and elsewhere, is that the decline in the fertility rate is related to the high cost of living, which in Singapore is certainly an issue, but not to the extent that it should be considered the most important factor. The primary reason for the decline in fertility is partly due to an absence of work-life balance, followed by a lack of leisure activities geared towards creating an environment that is conducive for raising children.
To counter these issues, the Ministry of Manpower and the Ministry of Finance, in consultation with the Monetary Authority of Singapore, should create a sustainable model for basic wages that is in line with the current inflation rate, pursuant to a yearly review that should be included in the national budget. Moreover, the government should look into reviewing the current five-and-a-half-day work week, by piloting a cross sectional study of a three-day working week, or by reducing the maximum number of hours per week that people can work.
Some countries are using financial incentives as well as parental leave programs in an attempt to stem the decline in the rate of fertility. For instance, the Lithuanian model of increasing birthrates for parents is to offer a generous period of fully paid parental leave. Germany provides both parents with the option of taking paid leave, with the state defraying the costs. The state pays the parent who stays home with the child 65 percent of that parent’s current net income for a year. If both parents decide to take time off, then the total number of months increases from 12 to 14 months.
Even with such an attractive scheme in place, both Lithuania and Germany still suffer from low fertility rates. Germany at least offsets this somewhat with its immigrant friendly policies; however, merely relying on benefits seems to be doing very little to increase population growth for either country.
Still, having the state defray the opportunity costs of lost income at least helps to engender a vision of a child-friendly society. In Singapore, apart from instituting paid parental leave, it would be beneficial for the government to sponsor social activities that give people a chance to meet others outside of their own network.
At present the total fertility rate is dangerously low (1.3 in 2012), and if it stays at that level, drastic measures will be required to prevent economic stagnation. For instance, the government would need to increase the retirement age to prevent the labor force from shrinking further. It might also choose to invest in new technologies such as robotics, and to find a way to fuse them with labor intensive industries as a means of replacing the labor force. This sort of investment would of course be extremely costly, with a long wait to see any return on investment. As an alternative, then, the government could repeal its current immigration policy, aiming for a massive influx of immigrants to keep the economy going. That, however, could sow social discord.
The problem Singapore faces is that if it chooses to continue the same path, then in a generation or two it could be a society of geriatrics. On the other hand, if it elects to change its current policies then the country will face an uncertain future, as social experiments rarely turn out as expected.
Suhith Sitharthan has worked as a Maritime Security Analyst as well as a Southeast and Northeast Asian research analyst for a top think tank in Australia.
