China's shrinking labour force could impact economic growth in coming decades
May 13, 2021
Beijing [China], May 13 : The Chinese economy is growing fast but its shrinking labour force "could place a cap on China's potential economic growth" in coming decades, according to a government advisor.
The Census data released on Tuesday showed that China's total population rose by 5.8 per cent over the past decade -- the slowest pace of growth since at least the 1960s. It also showed the country's labour force is getting smaller.
The number of people aged between 15 and 59 dropped below 900 million to about 63 percent of the population -- down some 7 percentage points from a decade earlier.
Lin Yifu, a government adviser and former World Bank chief economist, predicted at a government forum in March that could happen as early as 2030 -- if it maintains an annual growth rate of between 5 per cent and 6 per cent over the next decade, CNN reported.
An accelerated drop in the labour force could make that tough. China's labour force could shrink by about 5 per cent over the next decade, according to calculations by Yue Su, an economist at the Economist Intelligence Unit in London.
"The likely consequent drop in the labour force, which has been falling since 2017, will place a cap on China's potential economic growth," Yue said Tuesday. "The demographic dividend that propelled the country's economic rise over recent decades is set to dissipate quickly."
China currently has as many elderly people as Japan in the early 1990s.
However, China's current GDP per capita -- a broad measure of a country's standard of living -- is just USD 10,504, compared to Japan's USD 31,465 in 1992, according to World Bank data.
"The brutal fact is that China is aging rapidly," said Larry Hu, chief China economist for Macquarie Group, in a research report on Tuesday. "A more brutal fact is that China is getting old before getting rich."
