Saturday, 22 June 2013

Is China's one child norm helpful for the country ?

Chinese population rose by leaps and bound during the second half of twentieth century. Thus Chinese government adopted one child norm to help the population. Under this social norm, a couple is allowed to have only one child. Dramatically, the growth of population dropped to less than 0.5% per year. 

But is this norm really helpful for the Chinese economy. How would it effect Chinese future? To answer this question let us first take a look at the China's current population age group :



    AGE DISTRIBUTION OF POPULATION AS OF 2012

Age group   |   % of population  |  Productive/Non-productive  |

       0-14                 17.2%                      Non-productive*

       15-64               73.4%                      Productive

       64-73^              9.4%                       Non-productive

*Children below 15 are not included in working population.
^Life expectancy in China is 75.

As you can see today over 70% of the population is productive. Most of them are employed in Manufacturing sector. Thus, Chinese economy is prospering today.

However by one-child norm you can see the percentage of children is quite low (i.e 15%).

Now lets try to calculate the Age distribution of population of China after 50 years. 

Current Chinese population is 1,344,130,000.
Current working population is 979,251,420.
After 1 year, 2% of working population (since working year is for 50 years) would retire.
2% of working population 19,585,028.4.

After 1 year, 7% of child population (since working year is for 14 years) would shift to working population.
7% of child population is 16,183,325.2.

So, working population of China in 2013 would be 979,251,420 + 16,183,325.2 - 19,585,028.4 = 975,849,716.8.
Thus there is 0.3% decrease in working population every year. After the one child norm this decrease is compounded.


ESTIMATED AGE DISTRIBUTION OF POPULATION AFTER 50 YEARS

Age group   |   % of population  |  Productive/Non-productive  |

       0-14                  12%                        Non-productive*

       15-64                63%                        Productive

       64-73^              25%                        Non-productive

*Children below 15 are not included in working population.
^Life expectancy in China would rise to 80 after 50 years.
You could clearly see that the working population is at stake. Since the population would go down in future, the working population would fall drastically. Clearly, the dependency of non-working population on working population would rise. Chinese so strong economy would slowly collapse till the end of this century. Chinese government would have to change working population age group (which is very tough) or remove its one-child norm. 

Your comments are most welcomed.



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