The Silent Change - Population Shift

"For child rearing, women carry most of the risk medically, emotionally and financially, especially if the father is absent."

If population size gives bragging rights, the winner by 2050 could be Nigeria. By then, one in ten children born into the world will be Nigerian. At the same time, the Japanese are facing possible extinction. Suppose current trends continue; the number of Japanese will drop by 30% by 2060. The Japanese as a distinct race could be gone within a thousand years. 

Meanwhile, China's population in 2022 was 1.4118 billion, dropping 850,000 from 2021. This long-predicted decline arrived sooner than expected as the national birth rate hit a record low of 6.77 per 1,000 people. 

By comparison, India, which will overtake China as the world's most populous country this year, was 16.42. The U.S. recorded 11.06 births per 1,000 people and the U.K. 10.08 births. 

None of this decline in the Chinese population is a surprise. The trend line has existed for years with a combination of the now-defunct one-child policy and increased wealth heralding the change. Add to that a population imbalance created by the cultural preference for sons. 

As I've covered in previous blogs, a replacement rate of 2.1 children per female is the minimum to sustain population levels. The 'total fertility rate' (TFR) figure is 2.4 worldwide (2019). China's TFR is currently 1.15, and Nigeria has the highest TFR at 4.7 (2021).

That once-feared population bomb defused itself. World population growth peaked in 1962 and has been going downhill ever since. Yet, at the same time, the fact that we live longer kept the population figures high. Although, even that factor is declining in importance.

In Scotland, which has the lowest life expectancy in western Europe, males can expect to live to 76, down from around 77 two years ago. Politicians sought to attribute this fall to Covid alone. The virus may have played a role, but the trend was underway before Covid came along. Deprivation, poor diet, plus high levels of drug and alcohol abuse play a significant role. Poor policies can reverse the gains made in human progress.

As its prosperity grows, China is experiencing the same repercussions that hit other developing nations; a middle class emerges, and women take control of reproduction. Japan, South Korea and Singapore are other notable examples. Such is the nature of progress.

Much of recent media coverage proffered that this population drop spells the end of China's growth. And, for sure, while it will have some negative consequences, it is possible to overstate the effects. But, in the short and intermediate term, claims that the Chinese economy will collapse are flawed analyses.

Let's crunch some numbers. Of the four top economies (with the E.U. considered a single entity), the population shares are China at 18.47%; the E.U. at 5.47%; the U.S. at 4.25%; and Japan at 1.62%. The total population of EU+US+Japan is 883,833,178 (11.34%), and this is still only 61.41% of China's population. 

Counting by country, China's population is equal to 61 developed countries. That number of people confers economic heft, especially as wages remain lower than elsewhere.

Now consider that annually, China dominates in international mathematical, chemistry and physics olympiads. It is producing more graduates in the sciences and tech subjects than the rest of the world combined.

And while it is often claimed that the Chinese cannot innovate and only gain an advantage by cheap labour producing copied goods, that belief is old hat. In 2021, China filed 1.59 million patent applications — more than double that of the USA. Granted, China lags in high-end innovations. Still, given its track record, it is only a matter of time before it closes that gap.

With per capita GDP, China is only 1/6 the size of the U.S. Hence; there is still considerable room for improvement. In conclusion, China's economy will play a substantial role, if not a leading role, in this millennium, assuming the appropriate policies are in place.

Now while China may wish to encourage childbirth, the experience from many other places is not encouraging. Experts attempting to model the outcome of various incentives have concluded these don't work. 

In the book 'Why Demography Matters' the authors acknowledge, "We don't fully understand why what is happening is happening. That is because what we are studying is a very complex system. None of our models produces predictable outcomes." This shouldn't be a surprise; people are not clones in a monoculture, so modelling behaviours is somewhat tricky, if not impossible. 

And yet, the paradox is we can say that as a country's GDP increases, women have fewer children. Thus, we know the mechanism that brings about the fall in the birth rate, while we have few workable ideas on encouraging ladies to give birth. 

Singapore is well recognised as having the most comprehensive pro-natalist policies. These were refined and tweaked over decades. Still, the impact has proven minimal at best. For example, the government covers up to one-third of child-rearing costs, yet the TFR has not risen above 1.3.

Fortunately, no one is suggesting we revert to the 'handmaiden' type practices with women as baby-producing units in an Orwellian society.

Providing tax breaks, support services and other measures may help but alone are not enough to counter the substantial cultural forces at work. Moreover, having attained equal access to education and made careers, women are naturally reluctant to sacrifice this achievement to the considerable commitment of child-rearing. 

After all, women carry most of the risk medically, emotionally and financially, especially if the father is absent. Besides, there is no escaping the truth that evolution shaped the family unit to offer a child the best outcomes by making child-rearing a joint enterprise. 

How we transform societies to address these issues remains the challenge. Sure, governments can do certain things by making sound policies. But, at the same time, commercial entities will need to do their bit to benefit the broader community. For example, flexible working practices, workplace creches, and other supporting initiatives will help retain staff.

Of course, countries can sustain their populations by allowing migrants in. Although, as British politics affirms, this is not without risks. The indigenous people may grow hostile to new arrivals that lower wages, take up scarce resources or are perceived to displace the natives. So the potential for dislocating social unrest arises. 

The Brexit referendum, widely seen as a vote against migration, is an illustration. And yet, the U.K. could not sustain the NHS without migrants, as some 17% of NHS staff are non-British citizens. 

Looking ahead, the movement of people, both by legal and illegal means, isn't going to ease. Indeed, it will increase. And change is always confusing. 

Still, nations that manage these movements well by driving integration and sustaining their indigenous population's culture should prosper. Those that don't face potential societal disorder with the gradual erosion of their economic clout.

Getting it right won't be easy.