WEBVTT - China's Shrinking Population Weighs on Economy 0:00:02.440 --> 0:00:06.240 You're listening to Asia Centric from Bloomberg Intelligence, the podcast 0:00:06.240 --> 0:00:09.600 that explores the big ideas and trends moving money across 0:00:09.600 --> 0:00:12.200 the region. I'm John Lee in Hong Kong, and I'm. 0:00:12.160 --> 0:00:14.080 Kai JIDM Dreva, also in Hong Kong. 0:00:14.800 --> 0:00:15.040 John. 0:00:15.320 --> 0:00:19.279 Last month, China released some really interesting numbers and it 0:00:19.320 --> 0:00:24.119 wasn't just GDP. They also released data on population. And 0:00:24.160 --> 0:00:26.520 we've known for some time population has been falling in China. 0:00:26.640 --> 0:00:29.600 While for the third year in a row, the nation's 0:00:29.600 --> 0:00:30.600 population declined. 0:00:30.840 --> 0:00:33.800 And remember that twenty twenty four was the Year of 0:00:33.840 --> 0:00:37.040 the Dragon, that's considered an auspicious year to have kids. 0:00:37.320 --> 0:00:40.720 Yeah, and it was. I mean, we had more babies 0:00:40.760 --> 0:00:43.840 born in China, but it still wasn't enough to sort 0:00:43.880 --> 0:00:48.000 of offset the population decline. And it's not necessarily a 0:00:48.040 --> 0:00:50.440 bad thing to have a smaller older population. You know, 0:00:50.560 --> 0:00:53.720 you have people living longer lives, and you also have 0:00:53.920 --> 0:00:57.880 scientists point to fewer resources being used to sustain a 0:00:57.960 --> 0:00:59.880 population or sustain a country. 0:01:00.120 --> 0:01:04.880 But unfortunately, financial markets take a falling population quite negatively. Well, 0:01:04.959 --> 0:01:07.880 today we have a guest who's written extensively on this topic. 0:01:08.280 --> 0:01:12.600 She is aiderly senior consumer analyst at Bloomberg Intelligence. Aida, 0:01:12.680 --> 0:01:13.399 Welcome to the show. 0:01:13.760 --> 0:01:14.600 Thank you very much. 0:01:15.400 --> 0:01:18.119 Ada. What did the latest data release tell us about 0:01:18.200 --> 0:01:19.000 Chinese population? 0:01:19.880 --> 0:01:22.520 Well, you know, for twenty twenty four, we have seen 0:01:22.560 --> 0:01:26.680 the population at about one point four eight billion people, 0:01:27.000 --> 0:01:30.240 so it was a decline from the previous year, even 0:01:30.280 --> 0:01:33.120 though the birth rate has increased. So what we are 0:01:33.160 --> 0:01:36.320 seeing is that people are getting older. The death rate 0:01:36.440 --> 0:01:40.160 is definitely climbing on a year on year basis, and 0:01:40.480 --> 0:01:42.800 the birth rate in terms of the boost is mainly 0:01:42.880 --> 0:01:45.000 due to the year of the Dragon as well as 0:01:45.040 --> 0:01:49.480 there's a pent up in babies because of COVID and 0:01:49.560 --> 0:01:51.880 so forth. But if you look at the marriage rate 0:01:52.200 --> 0:01:55.480 for twenty twenty four, it reached record low and hint's 0:01:55.520 --> 0:01:58.520 going forward, if less people are getting married, the birth 0:01:58.600 --> 0:01:59.960 rate is unlikely to pick up. 0:02:00.680 --> 0:02:02.960 Now, we have a lot of listeners in the States 0:02:03.000 --> 0:02:05.960 and Western countries, and it may be good to explain 0:02:05.960 --> 0:02:09.320 a bit about why the marriage component is really important 0:02:09.360 --> 0:02:11.720 for stats here because in places like Friends or the States, 0:02:11.720 --> 0:02:14.040 you know, you can have more than fifty percent of 0:02:14.120 --> 0:02:17.080 children I think come out of outside of marriage. But 0:02:17.120 --> 0:02:18.560 it's quite different in Asia. 0:02:18.360 --> 0:02:23.000 Right correct, especially in China where the society still view 0:02:23.160 --> 0:02:27.280 marriage as the base of the society. And also what 0:02:27.440 --> 0:02:30.160 happened is if your child is born out of a 0:02:30.280 --> 0:02:34.360 legitimate marriage, it becomes quite tricky with the hukou system 0:02:34.720 --> 0:02:40.240 where it is linked to social securities, healthcare, education, so 0:02:40.320 --> 0:02:43.360 everything becomes a lot more difficult for the child born 0:02:43.400 --> 0:02:46.480 out of marriage. So that's why it is very important 0:02:46.480 --> 0:02:49.400 to look at the marriage rate and then to project 0:02:49.440 --> 0:02:50.359 the birth rate. 0:02:50.560 --> 0:02:53.160 And ada, can you give us some numbers exactly how 0:02:53.200 --> 0:02:55.919 many babies were born in China last year and how 0:02:55.960 --> 0:02:58.120 does this compare versus the history. 0:02:59.200 --> 0:03:02.280 So last year we had about nine point five million 0:03:02.480 --> 0:03:07.160 babies were born, and when you look at historically, they 0:03:07.200 --> 0:03:10.519 were much higher. So twenty years ago, the twenty years 0:03:10.560 --> 0:03:13.880 high was nineteen point eight million babies per year. So 0:03:13.960 --> 0:03:17.280 this is literally half already and going forward, we are 0:03:17.320 --> 0:03:20.000 projecting that it could gradually dip to about seven point 0:03:20.120 --> 0:03:23.600 nine million babies by twenty thirty five. So the trajectory 0:03:23.680 --> 0:03:27.320 is definitely going down. And that's because of the high 0:03:27.400 --> 0:03:31.120 cost of having babies, and that's not only financially, but 0:03:31.160 --> 0:03:34.720 it's also on the resources in terms of the mother's 0:03:34.760 --> 0:03:37.960 time or the parents' time to raise the children. The 0:03:38.320 --> 0:03:42.800 education system has been very tough, a high youth unemployment rate, 0:03:43.040 --> 0:03:44.960 which means that if you have your child, now what 0:03:45.040 --> 0:03:46.760 are they going to do when they get older? Will 0:03:46.800 --> 0:03:49.160 they get a job? Will they be able to sustain themselves? 0:03:49.200 --> 0:03:53.400 So all these are actually on the potential parents' mind 0:03:53.480 --> 0:03:56.040 at the moment, and of course you know that will 0:03:56.080 --> 0:03:59.440 come with what will the government be able to stimulate 0:03:59.440 --> 0:04:03.160 them or learn them with bonuses or incentives. So the 0:04:03.200 --> 0:04:06.760 government has been coming out with very very creative ways 0:04:06.920 --> 0:04:11.760 of trying to stimulate people to have children. And I 0:04:11.800 --> 0:04:15.800 have a very interesting case study recently. There's a lower 0:04:15.840 --> 0:04:20.799 tier city called Tienmen. In twenty twenty four, Tienman's birth 0:04:20.880 --> 0:04:23.920 rate went up by seventeen percent. 0:04:25.000 --> 0:04:27.160 That's virtually unheard of exactly. 0:04:27.320 --> 0:04:29.480 Of course, you know twenty twenty four the birth rate 0:04:29.560 --> 0:04:33.960 went up, but seventeen percent is a massive search. And 0:04:34.279 --> 0:04:37.400 when you dig deeper, the local governments have been putting 0:04:37.440 --> 0:04:40.360 a lot of different subsidies, a lot of help to 0:04:40.560 --> 0:04:43.640 the parents in order to lure them to have more children. 0:04:44.040 --> 0:04:47.599 When you add up all the various subsidies, including some 0:04:47.680 --> 0:04:51.599 of them is one time home buying subsidies, it could 0:04:51.760 --> 0:04:56.240 be about thirty one thousand US dollar, so it is 0:04:56.279 --> 0:04:59.279 actually quite a big if you call it a baby 0:04:59.320 --> 0:05:01.760 cash bonus to stimulate birth. 0:05:02.160 --> 0:05:04.520 So can you dig deeper into some of these subsidies, 0:05:04.560 --> 0:05:06.520 like what are they and what are some of the 0:05:06.520 --> 0:05:07.800 more creative ones you've heard of? 0:05:08.400 --> 0:05:12.440 Well, for Tienman's when in particular, they have the subsidies 0:05:12.480 --> 0:05:18.320 for genetic screening, so for like DWNCE syndromes, birth maternity leads. 0:05:18.720 --> 0:05:22.159 These are you know, prolonging it giving also paternity leads, 0:05:23.160 --> 0:05:26.200 monthly childcare subsidies after the age of three years old, 0:05:26.960 --> 0:05:29.920 as well as other measure like the birth rewards, so 0:05:29.960 --> 0:05:33.839 it's a cash reward, the home purchase incentives, and they're 0:05:33.920 --> 0:05:37.560 also giving mothers a bunch of fresh flowers, a one 0:05:37.680 --> 0:05:41.800 time taxi ride and all these a card also you 0:05:41.839 --> 0:05:43.880 know to say well done, to heal a child. You know, 0:05:43.880 --> 0:05:48.520 it's all these really really innovative ideas that the local 0:05:48.560 --> 0:05:51.320 governments are doing in order to try to lure people 0:05:51.400 --> 0:05:52.200 to have more children. 0:05:52.600 --> 0:05:55.160 How much do you think the flowers and cord helped. 0:05:56.440 --> 0:05:59.480 I think the flowers would help a little bit because 0:05:59.520 --> 0:06:03.320 it's you know, showing a bit of appreciation, but definitely 0:06:03.600 --> 0:06:06.400 I would rather take the cash. To be honest, monthly 0:06:06.560 --> 0:06:09.599 monthly monthly monthly cash is very good. And also I 0:06:09.600 --> 0:06:13.120 think beside the monthly cash is you know, the childcare system. 0:06:13.440 --> 0:06:15.400 Who's going to look after the child when you go 0:06:15.520 --> 0:06:19.320 back to work. I think it's the whole integrated system 0:06:19.440 --> 0:06:22.719 that the government or the various local governments are trying 0:06:22.760 --> 0:06:25.360 to fix. So these are some of the other innovative 0:06:25.400 --> 0:06:29.080 ones we've seen. Is you know, having childcare support, the 0:06:29.240 --> 0:06:33.120 crash open for a little bit longer, all these various 0:06:33.120 --> 0:06:36.960 supportive measures just to help the parents in order to 0:06:37.080 --> 0:06:37.760 have the kids. 0:06:38.600 --> 0:06:41.400 This is a really interesting case study that you mentioned. 0:06:41.720 --> 0:06:45.919 Do you know why it worked in that particular region 0:06:46.200 --> 0:06:49.920 but not elsewhere in China Because it's not just that 0:06:50.000 --> 0:06:53.839 one government that's been dolling out cash so to speak. 0:06:54.360 --> 0:06:55.840 This has been a few years now, you know, it 0:06:55.920 --> 0:06:59.680 started with disassembling the one child policy and then since 0:06:59.680 --> 0:07:02.760 then it's become basically a three child policy. The government 0:07:02.800 --> 0:07:06.200 has been very vocal about it, and local governments have 0:07:06.279 --> 0:07:09.560 been given cash subsidies at marriage at the point of 0:07:09.720 --> 0:07:13.320 you know, getting married, as well as baby bonuses and 0:07:13.720 --> 0:07:16.000 childcare subsidies and things like that. So do you have 0:07:16.040 --> 0:07:19.760 a sense of why it particularly worked in this place. 0:07:19.840 --> 0:07:22.080 Is it to do with the population maybe, or how 0:07:23.000 --> 0:07:24.640 maybe all these things are tied together. 0:07:25.640 --> 0:07:28.400 I think firstly, when you look at Tienman as a 0:07:28.560 --> 0:07:31.880 standalone case study, when you look at the birth rate 0:07:32.040 --> 0:07:35.080 for the past ten years, the city has been declining, 0:07:35.760 --> 0:07:39.000 so this is a V shape recovery from the bottom, 0:07:39.080 --> 0:07:41.720 so there's a base effect as well, so that's the 0:07:41.760 --> 0:07:44.560 first thing. Secondly, I think it all ties together with 0:07:45.080 --> 0:07:47.680 maybe that's the timing of such that there was the 0:07:47.800 --> 0:07:50.600 COVID delay in terms of having baby, the year of 0:07:50.640 --> 0:07:54.720 the dragon, plus all these different bonuses coming all together 0:07:54.800 --> 0:07:58.200 at the same time that stimulate the I was called 0:07:58.200 --> 0:08:02.120 the demand for babies in terms of other cities and 0:08:02.160 --> 0:08:05.280 other provinces, and correctly point out as you have done this, 0:08:05.440 --> 0:08:11.000 so they have been increasing the subsidies maternity leaves, paternity 0:08:11.080 --> 0:08:14.880 leaves or those for the past decade already and yielding 0:08:15.080 --> 0:08:19.600 limited impact. I think it could be the amount, so 0:08:19.960 --> 0:08:24.080 it's actually how much you're being subsidized, as well as 0:08:24.120 --> 0:08:27.080 maybe just the population was the pen of demand. 0:08:28.600 --> 0:08:32.360 So overall, basically we shouldn't be reading into this as 0:08:32.400 --> 0:08:37.400 a sign of more positive growth. To come In other words, 0:08:37.400 --> 0:08:40.400 you know, you did a deep dive on this data, 0:08:40.480 --> 0:08:42.520 you know, going back a year now, and you pulled 0:08:43.000 --> 0:08:46.920 sort of provincial statistics and you came out with incredible 0:08:47.000 --> 0:08:49.800 array of charts. I really wanted to ask you this 0:08:49.880 --> 0:08:53.480 question just in terms of like your your overall findings, right, 0:08:53.559 --> 0:08:57.640 which is that all of this data you crunched and 0:08:57.679 --> 0:09:01.640 you found that the government probably won't be able to 0:09:01.679 --> 0:09:05.040 reverse this. Why did you come to that conclusion overall? 0:09:05.120 --> 0:09:06.400 You know, it's a big question. 0:09:06.440 --> 0:09:08.720 It is a very big question. Then you have correctly 0:09:08.720 --> 0:09:11.960 somethed of my research as well. I believe that the 0:09:11.960 --> 0:09:14.960 baby bus is irreversible. I think it will be a 0:09:15.080 --> 0:09:18.000 very tall order for them to reverse. And that's not 0:09:18.160 --> 0:09:20.480 only because you know they have done a lot of 0:09:20.520 --> 0:09:24.440 things cash bonuses trying to fix the overall system. I 0:09:24.440 --> 0:09:26.920 think that could help the baseline. But in terms of 0:09:26.960 --> 0:09:32.240 the incremental increase of population, I think it is very 0:09:32.280 --> 0:09:36.600 difficult because of the cultural shift. If you look at 0:09:36.640 --> 0:09:40.640 the youngster these days, what are they focusing on self love, 0:09:40.880 --> 0:09:47.080 self fulfilling and also trying to enjoy the moment. These 0:09:47.200 --> 0:09:51.000 does not go hand in hand with having children. Some 0:09:51.040 --> 0:09:54.640 people are saying Are these youngster being irresponsible because they're 0:09:54.679 --> 0:09:57.680 not procreating? But in my view, I think they're actually 0:09:57.679 --> 0:10:01.120 being more responsible because they they struggle to see their 0:10:01.160 --> 0:10:05.360 own future, especially given the current job environment. They can't 0:10:05.440 --> 0:10:08.040 see beyond maybe even next year. Are they still going 0:10:08.120 --> 0:10:09.719 to have a job, Are they still going to have 0:10:09.760 --> 0:10:12.760 money on the table? Is this the right time for 0:10:12.840 --> 0:10:16.400 them to bring a life to earth? And you have 0:10:16.480 --> 0:10:18.680 to support them going forward. And this is not a 0:10:18.760 --> 0:10:22.560 one time item. This is ongoing maybe eighteen years if 0:10:22.600 --> 0:10:26.320 you're lucky. But if the child decide to continue studying university, 0:10:26.360 --> 0:10:29.240 you continue pushing and then when they have children, you 0:10:29.360 --> 0:10:32.400 still need to give the highly if it's a man, 0:10:32.559 --> 0:10:35.120 so you still need to have that kind of gift 0:10:35.200 --> 0:10:38.280 for the bride's family. So you need the house, you 0:10:38.360 --> 0:10:42.520 need the vehicle, you need everything. Everything is money. So 0:10:42.720 --> 0:10:45.160 are the youngster being irresponsible? I don't think so. I 0:10:45.200 --> 0:10:48.840 actually think they're being very responsible because they can't see 0:10:48.960 --> 0:10:52.319 their own future. And in order for them to fix 0:10:52.400 --> 0:10:56.280 it at the government level, I think the fundamental is 0:10:56.320 --> 0:10:59.880 to fix the economy so that you get the economic 0:11:00.559 --> 0:11:02.640 maybe the wealth effect coming. 0:11:02.400 --> 0:11:07.480 Through before for the listeners outside of Asia, usually the 0:11:07.640 --> 0:11:11.199 man has to provide the house and the woman has 0:11:11.200 --> 0:11:13.720 to provide everything inside the house. Is that generally how 0:11:13.720 --> 0:11:14.080 it works. 0:11:14.120 --> 0:11:16.320 Yeah, I think generally how it works, but of course 0:11:16.320 --> 0:11:19.640 the society has changed these days. So also what happened 0:11:19.679 --> 0:11:23.080 is the men typically have to give the taily, which 0:11:23.240 --> 0:11:27.840 is a monetary amount, as a gift to the wife's family. 0:11:28.280 --> 0:11:32.760 So these ranges between the provinces in terms of monetary value, 0:11:33.240 --> 0:11:36.040 but it can be quite a lot. So we've done 0:11:36.040 --> 0:11:39.120 a research. When we look at Haylong Jiang, the highly 0:11:39.200 --> 0:11:43.520 amount on a per annual GDP basis is three hundred 0:11:43.559 --> 0:11:48.400 times of the families. It is very expensive as a 0:11:48.440 --> 0:11:51.880 province on the northern side of China, that's the most expensive. 0:11:51.880 --> 0:11:54.680 But it is in our research that we have ranked 0:11:54.679 --> 0:11:58.400 them according to the GDP because absolute amount, I think 0:11:58.440 --> 0:12:01.600 Beijing and shang High on the largest city you will 0:12:01.679 --> 0:12:03.760 see the largest amount, but if you look on a 0:12:03.800 --> 0:12:06.480 per GDP level, that is actually the province with the 0:12:06.559 --> 0:12:07.760 highest taily amount. 0:12:09.360 --> 0:12:13.280 Asia Centric is produced by Bloomberg Intelligence, where more than 0:12:13.320 --> 0:12:17.400 five hundred experienced analysts and strategists work around the clock 0:12:17.440 --> 0:12:21.480 to bring you timely, world class research. Our coverage spans 0:12:21.559 --> 0:12:26.320 two hundred market indices, currencies, commodities, and industries, as well 0:12:26.360 --> 0:12:29.599 as over two thousand equities and credits. If you like 0:12:29.679 --> 0:12:33.240 what you hear, don't forget to subscribe and chirm and 0:12:33.280 --> 0:12:35.720 aida to what extent do you think this is a 0:12:35.760 --> 0:12:39.559 self inflicted problem? Because China had a one child policy 0:12:39.600 --> 0:12:43.000 for so many years and they only recently rolled that back, 0:12:43.400 --> 0:12:47.280 And we've seen a generation of families used to having 0:12:47.400 --> 0:12:51.240 a really small family like three people, like two parents 0:12:51.240 --> 0:12:55.880 and one kid. Can cultural value suddenly change so quickly 0:12:55.960 --> 0:12:57.120 to have a larger family. 0:12:58.000 --> 0:13:00.000 Yes, And I think if you look at the world 0:13:00.000 --> 0:13:03.480 one child, two child, three child policy, it took them 0:13:03.600 --> 0:13:06.720 thirty seven years to move from one child policy to 0:13:06.800 --> 0:13:09.960 two child policy, and it only took them five years 0:13:10.000 --> 0:13:12.120 to say maybe we need more children, so now it's 0:13:12.120 --> 0:13:15.640 three child policy. But culturally, I think it is very 0:13:15.679 --> 0:13:19.520 tricky because you're not use or the parents that supposingly 0:13:19.600 --> 0:13:22.400 parents now they're not used to having large families, so 0:13:22.440 --> 0:13:24.640 you're not used to having a lot of cousins. It 0:13:24.720 --> 0:13:27.319 is not in the culture. They're not growing to have, 0:13:27.440 --> 0:13:30.760 you know, share their stuff with other people, so it 0:13:30.760 --> 0:13:34.600 becomes a very different dynamic versus you know, the Western 0:13:34.640 --> 0:13:37.439 world where maybe you're used to having at least two 0:13:37.520 --> 0:13:41.920 to three siblings. So I think culturally it is very 0:13:41.960 --> 0:13:46.160 difficult to reverse if you think about it. If you 0:13:46.320 --> 0:13:49.000 are if I can call it the product of a 0:13:49.040 --> 0:13:52.880 one child policy, you are the princess or the prince 0:13:53.400 --> 0:13:57.240 in your family when you get married. If you're the girl, 0:13:57.360 --> 0:13:59.840 will you want to pick up someone else's dirty socks? 0:14:00.760 --> 0:14:02.920 And if you are the men, why do I want 0:14:02.920 --> 0:14:05.559 to spend money buying your chanel bag when I can 0:14:05.600 --> 0:14:09.040 spend it on my gain. So it is all about, 0:14:09.400 --> 0:14:12.360 you know, I need to love myself because I was 0:14:12.600 --> 0:14:16.240 brought up to love myself and everyone loved me. And 0:14:16.280 --> 0:14:19.600 then it's very difficult in terms of the change that 0:14:19.760 --> 0:14:21.680 type of thought process. 0:14:21.720 --> 0:14:26.080 In my view, you've noted a lot of barriers here 0:14:27.120 --> 0:14:31.800 to increasing the birth rate and increasing the population. So 0:14:32.480 --> 0:14:39.640 there's the societal issues, there's the kind of cultural norms, economics, 0:14:39.920 --> 0:14:43.280 you know, the fact that you might not be increasing 0:14:43.400 --> 0:14:45.520 your income the way you like, You might not be 0:14:45.560 --> 0:14:48.040 able to afford a house. The property market is still 0:14:48.640 --> 0:14:52.720 in the red in China and economic growth is set 0:14:52.760 --> 0:14:57.720 to slow starting this year. So is there anything I 0:14:57.760 --> 0:15:02.359 guess that the government could do, Whether it's a policy 0:15:02.760 --> 0:15:07.520 or a systemic shift that would actually help to increase 0:15:07.800 --> 0:15:09.960 birth in fertility rates, or do you see this more 0:15:10.000 --> 0:15:14.040 as perhaps like a regional or just a global shift, 0:15:14.240 --> 0:15:18.360 because it's of course not just China experiencing population decline 0:15:18.480 --> 0:15:21.640 and this rapid decline fertility rates. You know, there's also 0:15:21.680 --> 0:15:25.320 South Korea, but there's also places like Italy. Even in 0:15:25.360 --> 0:15:29.120 the States there's been declining fertility for some years. So yeah, 0:15:29.160 --> 0:15:32.880 I guess is there anything the government you could do 0:15:33.120 --> 0:15:35.160 or is it maybe just a case of we need 0:15:35.200 --> 0:15:38.560 to find a way to slow down the decline. 0:15:38.760 --> 0:15:41.240 I think there are still some room for the government 0:15:41.400 --> 0:15:44.840 to maneuver. Given that they have in row the one 0:15:44.920 --> 0:15:48.080 child policy to child policy. They can definitely make it 0:15:48.120 --> 0:15:51.320 more strange for you to have children. I think that's 0:15:51.400 --> 0:15:53.800 one way of forcing people, But I think that is extreme, 0:15:53.880 --> 0:15:56.720 to be honest. I think the Chinese government is very 0:15:56.720 --> 0:15:59.560 careful in terms of how to implement this, and my 0:15:59.680 --> 0:16:02.520 view is that they will likely try to use incentives 0:16:02.760 --> 0:16:05.880 rather than strict policy measure to say everyone must have 0:16:05.880 --> 0:16:09.360 a child. I think incentive wise, it is one of 0:16:09.400 --> 0:16:14.720 the key performance indicator for most of the provincial governments 0:16:14.800 --> 0:16:17.840 to stimulate birth. So I think, you know, given that 0:16:18.360 --> 0:16:21.160 is one of these KPIs, I do believe that the 0:16:21.200 --> 0:16:25.520 provincial governments are likely to increase the intensity of these 0:16:25.560 --> 0:16:31.840 type of incentives going forward, so healthcare, maternity benefits, as 0:16:31.920 --> 0:16:37.240 well as protecting the family when they have children, so 0:16:37.480 --> 0:16:40.640 from you know, workforce equality and so forth. I think 0:16:40.680 --> 0:16:43.600 these are all measures that they can still do and 0:16:43.640 --> 0:16:47.960 still lots of room to improve. But going forward, I 0:16:48.000 --> 0:16:50.400 do agree with you. I think it's about, you know, 0:16:50.480 --> 0:16:54.480 slowing down the rate of decline. If you look at globally, 0:16:54.920 --> 0:16:59.040 it is natural for country once they developed a certain stage, 0:16:59.160 --> 0:17:02.840 to start declining in terms of population. It is almost 0:17:02.840 --> 0:17:06.000 like a natural way of working. Can they buck the trend? 0:17:06.000 --> 0:17:07.080 I think it is a little bitrick key. 0:17:07.400 --> 0:17:10.119 So I know, you came up with a detailed model 0:17:10.359 --> 0:17:14.080 forecasting China's population. How bad can it get over the 0:17:14.119 --> 0:17:15.760 next few years? Give us some numbers. 0:17:16.240 --> 0:17:20.000 Sure, So, based on our model, it could drop by 0:17:20.160 --> 0:17:24.600 almost fifty million people to one point three six billion 0:17:24.600 --> 0:17:28.840 people by twenty thirty five. This is our base case 0:17:28.880 --> 0:17:32.600 scenario where birth rate will continue to decline except for 0:17:32.640 --> 0:17:35.000 the years of the dragon. So we actually factor in 0:17:35.320 --> 0:17:38.520 the nuances of year of the Dragon, as well as 0:17:38.640 --> 0:17:41.640 our view on the marriage ray divorce rate, as well 0:17:41.640 --> 0:17:44.639 of death rate. So we do believe that this will 0:17:44.880 --> 0:17:46.800 continue to decline going forward. 0:17:46.920 --> 0:17:50.440 Fifty million, that's roughly the size of is that the 0:17:50.480 --> 0:17:53.400 South Korean population or is it any other numbers there? 0:17:53.720 --> 0:17:55.200 It is as big as. 0:17:55.960 --> 0:17:57.840 At one point three times the size. 0:17:57.600 --> 0:17:59.439 Of California one point three times. 0:18:00.440 --> 0:18:03.520 What's the implications for some of the companies and sectors 0:18:03.520 --> 0:18:06.080 that you cover, especially for the consumer space. It's got 0:18:06.080 --> 0:18:09.359 to be negative, right for some of them. 0:18:09.480 --> 0:18:12.480 Is negative, but we do see some positivity coming from 0:18:12.520 --> 0:18:14.639 it as well. So let's start with the negative. The 0:18:14.680 --> 0:18:17.399 easiest one is definitely the baby milk formula. We have 0:18:17.480 --> 0:18:21.240 seen the decline in terms of the baby formula demand, 0:18:21.320 --> 0:18:24.440 and that's just less mouths to feed and the competition 0:18:24.560 --> 0:18:28.520 is intensifying. We're also seeing dairy products, you know, under 0:18:28.520 --> 0:18:30.359 a bit of pressure in terms of the demand because 0:18:30.560 --> 0:18:34.520 once again less people drinking milk and consuming the product, 0:18:34.840 --> 0:18:37.680 so basically a lot of the mass consumer product, we're 0:18:37.720 --> 0:18:42.560 seeing that kind of demand decline. Even for beer as well. 0:18:42.920 --> 0:18:45.879 If we use Japan as a case study, beer demand 0:18:45.880 --> 0:18:48.480 has been going down because the population has been declining. 0:18:48.920 --> 0:18:52.280 So we're seeing those type of absolute number declining for 0:18:52.720 --> 0:18:55.840 you know, and drives the volume. But what we also 0:18:55.960 --> 0:18:59.679 see in terms of opportunity and that something maybe like 0:18:59.720 --> 0:19:04.120 past because people are swapping out babies for pets, They're 0:19:04.160 --> 0:19:08.240 still looking for companionship. Remember our topic of self love. 0:19:08.680 --> 0:19:12.000 They need the companionship, they need the experiment. So people 0:19:12.000 --> 0:19:16.080 are willing to spend on their pets instead of having kids. 0:19:17.200 --> 0:19:19.560 And I think with the pet's economy is still in 0:19:19.600 --> 0:19:23.480 the growth pace, so with the decline in population and 0:19:23.520 --> 0:19:27.720 people getting older and lonier, I think people will seek 0:19:27.760 --> 0:19:32.000 more companionship from that as well. Other areas of actual 0:19:32.080 --> 0:19:35.800 opportunities of course, what we call the silver hair generation 0:19:36.119 --> 0:19:40.720 traveling these older people now some of them are retired 0:19:40.760 --> 0:19:44.720 already but living with good pension. So what are they doing. 0:19:44.760 --> 0:19:47.440 They can still walk around, they're still healthy, they're living longer, 0:19:47.720 --> 0:19:50.480 so they are traveling a lot more, and we're seeing 0:19:50.520 --> 0:19:55.840 those types of segments being benefiting from this trend. The 0:19:55.920 --> 0:19:58.840 other one, of course is vitamins and supplement as well. 0:19:59.240 --> 0:20:02.199 People as they get older, they are more willing to 0:20:02.320 --> 0:20:06.520 spend to enhance the health and well being. So something 0:20:06.600 --> 0:20:09.080 like this is also a good area to look into. 0:20:09.680 --> 0:20:12.320 So on note, is it kind of a maybe a 0:20:12.359 --> 0:20:15.600 positive thing then that people are living longer. I mean, 0:20:15.640 --> 0:20:18.560 I know there's fewer people making purchases, but it sounds 0:20:18.600 --> 0:20:21.320 like if you're living longer, you're going to be buying, 0:20:21.400 --> 0:20:23.760 like you said, more vitamins, You're going to be traveling more. 0:20:23.840 --> 0:20:26.720 You might be doing more house reunnos. I mean, if 0:20:26.720 --> 0:20:29.240 you have the money, I guess yes. 0:20:29.359 --> 0:20:33.520 So I think the spending categories will change. The spending 0:20:33.560 --> 0:20:35.560 will still be there, I think, but it's just what 0:20:35.640 --> 0:20:37.720 they spend on. Right, So if you look at the 0:20:37.760 --> 0:20:41.679 most basic stuff, say, for example, drinks, soft drink, what 0:20:41.680 --> 0:20:43.720 are you going to drink when they get older, They're 0:20:43.720 --> 0:20:47.399 going to drink less fuzzy stuff, less sugar stuff because 0:20:47.400 --> 0:20:50.639 they're looking for healthier alternative. So now what we're seeing 0:20:50.680 --> 0:20:55.480 is a proliferation of no sugar, less calorie teas. So 0:20:55.560 --> 0:20:59.080 it's the categories that are changing. Alcoholic drink also lower 0:20:59.080 --> 0:21:03.560 alcohol content because people are looking for healthy alternatives. So 0:21:03.720 --> 0:21:07.320 it's about the shift in the categories rather than the 0:21:07.359 --> 0:21:09.760 shift in the spending that's interesting. 0:21:09.800 --> 0:21:13.760 So it's not necessarily, you know, as catastrophic as it 0:21:13.840 --> 0:21:16.479 might be in other parts of the economy, like I'm 0:21:16.520 --> 0:21:20.159 thinking of the labor market or the fears of you know, 0:21:20.560 --> 0:21:25.000 less ingenuity, less productivity. It sounds like, at least for spending, 0:21:25.080 --> 0:21:26.879 it's not necessarily a bad news story. 0:21:27.440 --> 0:21:29.320 Yes, And I think a lot of the spending will 0:21:29.359 --> 0:21:33.400 also go into healthcare and pharmaceutical as well. So as 0:21:33.440 --> 0:21:38.240 people ages, they naturally require more healthcare and pharmaceutical spending 0:21:38.680 --> 0:21:41.399 and all the related items as well, such as e 0:21:41.400 --> 0:21:44.800 commerce healthcare where they can you know, go online and 0:21:44.840 --> 0:21:48.040 then just purchase and get the things deliver to the door. 0:21:48.320 --> 0:21:50.760 So I think it's the purchasing behavior that is changing 0:21:50.800 --> 0:21:53.480 as well, so it's not all catastrophic. And if you 0:21:53.520 --> 0:21:55.879 look at a lot of corporate and the companies, they 0:21:55.920 --> 0:21:59.080 are changing already. They're starting to go into like the 0:21:59.160 --> 0:22:04.040 less sugar, the more online driven, more you know, focus 0:22:04.200 --> 0:22:07.560 on older people. You'll see even on the apps they 0:22:07.600 --> 0:22:11.280 have the elderly version apps because the writings are bigger 0:22:12.240 --> 0:22:15.720 and it's easier to navigate. So you have to adapt 0:22:15.920 --> 0:22:18.639 to that type of dynamics. And I think the sooner 0:22:18.920 --> 0:22:22.320 the corporate adapt to it, the better. What we have 0:22:22.400 --> 0:22:25.520 seen in say, for example, dairy companies or INFANTMOE companies, 0:22:25.880 --> 0:22:29.119 they are started to put more effort trying to push 0:22:29.160 --> 0:22:32.840 for the elderly milk market. So instead of having infant milk, 0:22:32.840 --> 0:22:33.920 we're having elderly milk. 0:22:34.320 --> 0:22:35.840 Oh, I've seen that actually. 0:22:36.200 --> 0:22:40.840 Correct, instead of baby diapers, you have elderly diapers. So 0:22:40.920 --> 0:22:44.640