Some of the trends we study in class are very much at the forefront of public discourse: the rise of populism, the increase in inequality, the emergence of new technologies. Some trends, however, are more hidden. Nonetheless, they are often no less important than the visible ones. The example of China's falling birth rates is a case in point. Indeed, the situation with birth rates in China is a huge source of concern for the future of that country. As we will study in more detail in Module 9, the rapid ageing of the Chinese population and the eventual decline of its working-age population will put a lid on long-run growth there. A recent article over at Bloomberg contains details and numbers. This chart says it all:
The situation is so dire that population growth in China in 2021 was basically zero.
Why did this happen? Here is my quick take. Explosive birth rates in China following the Second World War led to the imposition of the One-Child Policy in 1980. The policy was enforced very stringently, and so, with a small lag, it led to a dramatic decline in births as seen in the chart above. In 2015 the policy was relaxed, but that did not lead to more births. On the contrary, the downward trend continued. It did so in part for cultural reasons: the one-child policy had lasting effects on family's fertility norms. The socially acceptable norm became to have fewer children. This was likely the result of social contagion and imitation. Growing levels of per capita income and education in China also contributed: birth rates tend to fall across the board when countries rise up in the income and education ladder. Then the COVID pandemic did not help: China is not the only example of plummeting birth rates as a result of the pandemic.
We will have a chance to discuss this issue in much more detail later in the class, of course. There are many interesting nuances that I am sure you will be eager to discuss. For instance, might these falling birth rates help the environment? To every coin there are two sides!