1 00:00:02,480 --> 00:00:05,280 Speaker 1: China has surged in recent years to become the world's 2 00:00:05,360 --> 00:00:09,080 Speaker 1: second largest economy, behind only that of the United States. 3 00:00:09,480 --> 00:00:12,480 Speaker 1: But while China looks like a juggernaut, it's not invincible. 4 00:00:12,960 --> 00:00:15,400 Speaker 1: The nation is facing a huge run up in debt, 5 00:00:15,720 --> 00:00:18,320 Speaker 1: as well as a brewing trade war with the US. 6 00:00:18,920 --> 00:00:23,720 Speaker 1: Yet there's one threat looming above all else, a declining population. 7 00:00:24,360 --> 00:00:26,880 Speaker 1: On the second of our two parts special on falling 8 00:00:26,920 --> 00:00:30,680 Speaker 1: fertility rates, we explore why Chinese women are having barely 9 00:00:30,720 --> 00:00:34,400 Speaker 1: any children and what that means for the Asian powerhouse. 10 00:00:43,600 --> 00:00:46,960 Speaker 1: Welcome to Benchmark. I'm Scott Lanman and economics editor with 11 00:00:47,000 --> 00:00:50,960 Speaker 1: Bloomberg News in Washington. On last week's episode, we spoke 12 00:00:51,000 --> 00:00:54,440 Speaker 1: with author Elizabeth Patkin about declining birth rates in the 13 00:00:54,600 --> 00:00:57,720 Speaker 1: United States and the struggles that people like her have 14 00:00:57,920 --> 00:01:02,720 Speaker 1: faced trying to overcome fortil problems. This week, we're turning 15 00:01:02,720 --> 00:01:06,640 Speaker 1: our attention to China. The country is facing perhaps the 16 00:01:06,680 --> 00:01:11,000 Speaker 1: biggest threat to its future, a population that's aging and 17 00:01:11,360 --> 00:01:15,920 Speaker 1: about to shrink. Cy Young, professor of sociology at the 18 00:01:16,000 --> 00:01:19,399 Speaker 1: University of North Carolina at Chapel Hill, is here to 19 00:01:19,440 --> 00:01:22,520 Speaker 1: tell us more. He's an expert in the demographics of 20 00:01:22,600 --> 00:01:28,080 Speaker 1: his native country, China, Professor PSI, welcome to benchmark my pressure. 21 00:01:28,600 --> 00:01:33,120 Speaker 1: First things first, when and why did China institute the 22 00:01:33,160 --> 00:01:36,920 Speaker 1: one child policy? China institute the one child part say 23 00:01:37,040 --> 00:01:42,360 Speaker 1: in seventy nine slash nighties exact time as a little 24 00:01:42,360 --> 00:01:46,240 Speaker 1: b mulky, because it was a decision in process. The 25 00:01:46,319 --> 00:01:50,680 Speaker 1: main reason, as announced the while to achieve to help 26 00:01:50,720 --> 00:01:54,040 Speaker 1: achieve the economic development and go China at the time 27 00:01:54,120 --> 00:02:00,240 Speaker 1: has gdpeople cabita at about two d dollars and the 28 00:02:00,440 --> 00:02:05,120 Speaker 1: goal was to reach about eight hundred dollars by the 29 00:02:05,200 --> 00:02:08,480 Speaker 1: end of century. That means by two thousand and by 30 00:02:08,639 --> 00:02:13,520 Speaker 1: some calculation. The way to ensure that to reach to 31 00:02:13,600 --> 00:02:17,160 Speaker 1: reach that a goal was to controice population within one 32 00:02:17,200 --> 00:02:21,920 Speaker 1: point to billing. That was the main reason. And what 33 00:02:22,000 --> 00:02:26,480 Speaker 1: was China's fertility rate in the nineteen seventies before that 34 00:02:26,560 --> 00:02:31,680 Speaker 1: policy was instituted, So the policy was institute in nine 35 00:02:34,040 --> 00:02:39,720 Speaker 1: ten years before that, China facility was around six kids 36 00:02:39,800 --> 00:02:44,760 Speaker 1: per woman issue and what is it now today today 37 00:02:45,000 --> 00:02:49,079 Speaker 1: is about one point five. That's you know, one point six, 38 00:02:49,280 --> 00:02:54,120 Speaker 1: you know, given the number is not published, that's my guestimate, okay, 39 00:02:54,200 --> 00:02:57,120 Speaker 1: So it's less than a third probably of what it was. 40 00:02:57,639 --> 00:03:01,440 Speaker 1: Before the policy. No, okay, let me just make sure 41 00:03:01,560 --> 00:03:06,040 Speaker 1: we understand this. Before the policy, if we refer to 42 00:03:06,240 --> 00:03:09,720 Speaker 1: nine and seventy nine, China's fraternity was at two point 43 00:03:09,840 --> 00:03:13,280 Speaker 1: seven kids per woman because it had already gone down 44 00:03:13,360 --> 00:03:17,680 Speaker 1: in anticipation of the policy. Basically, no, no, no, So 45 00:03:18,800 --> 00:03:23,160 Speaker 1: there was a major push by the Communist Party in 46 00:03:23,240 --> 00:03:28,280 Speaker 1: the nineties seventies called the name of the policy is 47 00:03:28,680 --> 00:03:32,720 Speaker 1: called later, longer and fewer. The idea was very simple, 48 00:03:33,080 --> 00:03:37,360 Speaker 1: we're basically pushing for later marriage, longer bus interview, and 49 00:03:37,520 --> 00:03:41,480 Speaker 1: fewer kids. And in rough free seven eighty years, China's 50 00:03:41,480 --> 00:03:46,280 Speaker 1: fraternity declined from rough free six kids to less than three. 51 00:03:46,480 --> 00:03:49,480 Speaker 1: By nine seventy nine, it was already at two point 52 00:03:49,560 --> 00:03:52,800 Speaker 1: seven two point eight in that range. Okay, So, thinking 53 00:03:52,840 --> 00:03:55,880 Speaker 1: about that effort that you just mentioned and the one 54 00:03:55,960 --> 00:03:59,720 Speaker 1: child policy in nineteen seventy nine, how much would you 55 00:03:59,760 --> 00:04:04,200 Speaker 1: say the one child policy is responsible for the decline 56 00:04:04,360 --> 00:04:07,680 Speaker 1: in fertility to about one point five or one point 57 00:04:07,760 --> 00:04:11,320 Speaker 1: six today, Like you said, not a much, you know, 58 00:04:11,400 --> 00:04:14,720 Speaker 1: so as in the number, uh what the number we 59 00:04:14,760 --> 00:04:18,479 Speaker 1: decided we discussed, tell us the much of a change, 60 00:04:18,920 --> 00:04:21,479 Speaker 1: the major part of a change happened before the launch 61 00:04:21,560 --> 00:04:26,160 Speaker 1: of the one child particy in ninety eight, not ninety eight, 62 00:04:26,400 --> 00:04:29,800 Speaker 1: all right, And there was a little bit declined from 63 00:04:29,960 --> 00:04:33,800 Speaker 1: two two point seven in ninety seventy nine to rough 64 00:04:33,920 --> 00:04:37,520 Speaker 1: rate one point six one point five ish right now, 65 00:04:38,000 --> 00:04:42,120 Speaker 1: But that is not it should not be entirely attribute 66 00:04:42,160 --> 00:04:46,039 Speaker 1: to the one child policy. We know in between those 67 00:04:46,480 --> 00:04:50,640 Speaker 1: thirty five forty years that China's socio economical change it 68 00:04:50,800 --> 00:04:54,440 Speaker 1: was enomous. So are you saying that you know, basically 69 00:04:54,480 --> 00:04:58,760 Speaker 1: because of the increased wealth, because of the expanding economy 70 00:04:58,800 --> 00:05:01,559 Speaker 1: in China. You know, the economic reforms that were also 71 00:05:01,640 --> 00:05:05,720 Speaker 1: instituted in the late nineties seventies, did that play a 72 00:05:05,760 --> 00:05:10,080 Speaker 1: bigger role in helping to spur decline in the fertility 73 00:05:10,160 --> 00:05:13,800 Speaker 1: rate than the one child policy by itself did. So 74 00:05:13,960 --> 00:05:16,919 Speaker 1: one child policy certainly had an effect, but if we 75 00:05:17,080 --> 00:05:20,919 Speaker 1: look in longer term, we know were observed across the 76 00:05:20,960 --> 00:05:26,320 Speaker 1: world when you know, society urbanized, when women's education increased, 77 00:05:26,560 --> 00:05:30,480 Speaker 1: that the general trend that the fratility would decline following 78 00:05:30,600 --> 00:05:35,719 Speaker 1: those general social economic development development. We demographers like to 79 00:05:35,800 --> 00:05:40,279 Speaker 1: call this as demographic transition. So yes, one child policy 80 00:05:40,400 --> 00:05:42,880 Speaker 1: had an effect, but if we look at longer term, 81 00:05:43,200 --> 00:05:47,599 Speaker 1: the social economic development probably prayed a more important role 82 00:05:47,720 --> 00:05:52,680 Speaker 1: that maintained China's fratility at a lower level. So let's 83 00:05:52,680 --> 00:05:56,000 Speaker 1: talk about China's population now. At the time the policy 84 00:05:56,080 --> 00:06:00,000 Speaker 1: was introduced, the country's population was just a bit shy 85 00:06:00,040 --> 00:06:04,279 Speaker 1: of one billion. Today it's around one point four billion. 86 00:06:04,839 --> 00:06:08,440 Speaker 1: Where is the population going from here? What's your forecast 87 00:06:08,520 --> 00:06:14,360 Speaker 1: for what is going to happen in the next forty years? Okay, 88 00:06:14,360 --> 00:06:17,080 Speaker 1: so the forecast is very clear. I think the best 89 00:06:17,200 --> 00:06:20,680 Speaker 1: forecast has been done on mostly widely slide of the 90 00:06:20,720 --> 00:06:25,520 Speaker 1: forecast has been the u n S population projection. Basically, 91 00:06:25,600 --> 00:06:30,279 Speaker 1: China's population would turn around in the next ten years 92 00:06:30,400 --> 00:06:34,040 Speaker 1: or so, you know, from positive growth. Right now it's 93 00:06:34,080 --> 00:06:38,880 Speaker 1: getting close to the uh so called zero growth, but 94 00:06:39,000 --> 00:06:42,040 Speaker 1: it will quickly turn around in about ten years, and 95 00:06:42,200 --> 00:06:46,240 Speaker 1: then we will see a very fast job from that 96 00:06:47,320 --> 00:06:51,039 Speaker 1: until in what level might end up at or where 97 00:06:51,839 --> 00:06:54,520 Speaker 1: until we don't know where the end is, you know, 98 00:06:54,839 --> 00:06:57,120 Speaker 1: right now we can only see the job probably all 99 00:06:57,160 --> 00:06:59,320 Speaker 1: the way to the end of this century. But it's 100 00:06:59,320 --> 00:07:04,000 Speaker 1: pretty that India will probably surpass China's as the world's 101 00:07:04,040 --> 00:07:07,440 Speaker 1: most populous nation. Oh yeah, yes, that that that that 102 00:07:07,640 --> 00:07:11,640 Speaker 1: is a done deal because the fraternity and even China 103 00:07:12,160 --> 00:07:17,480 Speaker 1: turned around very quickly that we demographers causes as a 104 00:07:17,560 --> 00:07:22,520 Speaker 1: population momentum. Basically, it takes a generation for the you know, 105 00:07:22,760 --> 00:07:25,320 Speaker 1: the younger generations to get into a productive age and 106 00:07:25,440 --> 00:07:28,280 Speaker 1: for them to reproduce again. You know what, we have 107 00:07:28,440 --> 00:07:33,080 Speaker 1: already saying that Chinese population in terms of a cohoscide 108 00:07:33,160 --> 00:07:38,760 Speaker 1: decline has been there for the last twoty some years now. 109 00:07:38,880 --> 00:07:44,600 Speaker 1: Professor in China changed the one child policy to a 110 00:07:45,040 --> 00:07:49,200 Speaker 1: two child policy, meaning people were officially or everybody was 111 00:07:49,240 --> 00:07:52,680 Speaker 1: officially allowed to have two children instead of just one. 112 00:07:53,120 --> 00:07:57,480 Speaker 1: Has that affected any of the population projections or caused 113 00:07:57,520 --> 00:08:01,840 Speaker 1: people to have more children? Uh? Not much. So the 114 00:08:01,920 --> 00:08:06,320 Speaker 1: hope was by relaxing this policy, more people will have 115 00:08:07,160 --> 00:08:12,480 Speaker 1: a second child and increasing the fraternity overall and basically 116 00:08:12,560 --> 00:08:17,800 Speaker 1: turned around the population trajectory. Unfortunately, you know what, do 117 00:08:17,880 --> 00:08:21,080 Speaker 1: the numbers are now in that the two sounds seventeen 118 00:08:21,160 --> 00:08:24,080 Speaker 1: we did not see a major increase. Actually comparing to 119 00:08:24,200 --> 00:08:27,600 Speaker 1: two sounds sixteen, we saw a decline in total number birth. 120 00:08:28,800 --> 00:08:33,240 Speaker 1: So given that trend and given you know that all 121 00:08:33,280 --> 00:08:37,559 Speaker 1: the other major chance in China including urbanization and increasing 122 00:08:37,600 --> 00:08:42,280 Speaker 1: women's education label for participation all those things. I don't 123 00:08:42,320 --> 00:08:46,320 Speaker 1: say any time soon that China's fratility will bump all 124 00:08:46,360 --> 00:08:50,200 Speaker 1: the way above the so called replacement level, So that's 125 00:08:50,240 --> 00:08:53,080 Speaker 1: not really having any effect. And we had an article 126 00:08:53,080 --> 00:08:57,160 Speaker 1: on Bloomberg recently that China is considering ending even the 127 00:08:57,240 --> 00:08:59,760 Speaker 1: two child policy and allowing families to have as many 128 00:09:00,000 --> 00:09:03,760 Speaker 1: alternate as they want. If that happens, will that have 129 00:09:03,840 --> 00:09:07,440 Speaker 1: any effect or or basically none like the previous changed it. 130 00:09:08,280 --> 00:09:10,880 Speaker 1: So you know, we will see on the two sides. 131 00:09:11,040 --> 00:09:13,920 Speaker 1: One on one side, because China is a big country 132 00:09:14,120 --> 00:09:16,960 Speaker 1: with one point for a billing in terms of number bus, 133 00:09:17,040 --> 00:09:18,959 Speaker 1: that should have have an effect. That's so that the 134 00:09:19,160 --> 00:09:22,920 Speaker 1: policy is the new policy would increasing the opportunity for 135 00:09:22,920 --> 00:09:25,319 Speaker 1: a family to have some family to have three even 136 00:09:25,360 --> 00:09:29,000 Speaker 1: focuss but overall on the macro level in terms of 137 00:09:29,040 --> 00:09:32,160 Speaker 1: total frateritory rate or the total number bus at the 138 00:09:32,480 --> 00:09:35,959 Speaker 1: entire country level, it should not and I don't anticipate 139 00:09:36,160 --> 00:09:41,040 Speaker 1: any major impact at least in the near future. Wow, 140 00:09:41,600 --> 00:09:45,440 Speaker 1: So what will happen to China's economic growth if the 141 00:09:45,559 --> 00:09:49,839 Speaker 1: population does start to decline like the u n IS forecasting. 142 00:09:50,200 --> 00:09:53,360 Speaker 1: The country has been reporting GDP growth of close to 143 00:09:53,440 --> 00:09:57,240 Speaker 1: seven percent a year in recent years, is that going 144 00:09:57,360 --> 00:10:01,760 Speaker 1: to go down significantly? So I'm kind of I'm not 145 00:10:01,840 --> 00:10:05,400 Speaker 1: an economist, it's it's always kind of fascinating and interesting, 146 00:10:05,440 --> 00:10:09,200 Speaker 1: intriguing at least to me. That why we like to 147 00:10:09,280 --> 00:10:13,520 Speaker 1: connect fratility directly to the economic growth. To me, it's 148 00:10:13,600 --> 00:10:17,760 Speaker 1: a more secondary, maybe tertiary thing. But indeed, if we 149 00:10:17,840 --> 00:10:20,920 Speaker 1: look at longer term this, you know, building up of 150 00:10:21,080 --> 00:10:27,800 Speaker 1: fraturity low faturity would lead to eventual decline of growth rate. Partly, 151 00:10:27,960 --> 00:10:30,839 Speaker 1: we know the population requires the label for us new 152 00:10:30,920 --> 00:10:35,600 Speaker 1: labels coming into the market. Partly, and more importantly, it's 153 00:10:35,840 --> 00:10:40,480 Speaker 1: the aging population. Right now, China is setting its retirement 154 00:10:40,480 --> 00:10:45,040 Speaker 1: age at fifty five for women and sixty uh for men, 155 00:10:45,240 --> 00:10:49,560 Speaker 1: and with data population continue to increase, that will create 156 00:10:49,760 --> 00:10:53,680 Speaker 1: a huge drag for the entire economy. Do you think 157 00:10:53,800 --> 00:10:58,719 Speaker 1: that might cause China to open up its borders much 158 00:10:58,760 --> 00:11:02,160 Speaker 1: more to allow more grants or migrant workers to come 159 00:11:02,160 --> 00:11:05,840 Speaker 1: into work in the country or live there. And it's 160 00:11:05,880 --> 00:11:11,680 Speaker 1: I think given the China size, migration probably will not 161 00:11:11,960 --> 00:11:16,400 Speaker 1: be considered as a priority for Chinese party makers. But 162 00:11:16,640 --> 00:11:21,839 Speaker 1: China is indeed try to entice certain selective migration entire 163 00:11:21,960 --> 00:11:26,040 Speaker 1: certain population to migrante into China. More likely China will 164 00:11:26,160 --> 00:11:30,200 Speaker 1: have to relax its retirement age or delayed through time 165 00:11:30,200 --> 00:11:34,800 Speaker 1: and age, oh train its population to into certain segments 166 00:11:34,840 --> 00:11:38,200 Speaker 1: of the labor market. Now, just going back to the 167 00:11:38,200 --> 00:11:41,120 Speaker 1: one child policy for a moment, I lived in China 168 00:11:41,200 --> 00:11:44,120 Speaker 1: for three years, and it's quite something to see a 169 00:11:44,160 --> 00:11:48,719 Speaker 1: whole generation of people that have grown up without siblings 170 00:11:48,760 --> 00:11:53,360 Speaker 1: as only children. How has the policy, or just the 171 00:11:53,400 --> 00:11:55,679 Speaker 1: decline in fertility, if you want to put it that way, 172 00:11:55,720 --> 00:11:59,360 Speaker 1: how has that affected Chinese life and culture in the 173 00:11:59,440 --> 00:12:05,040 Speaker 1: last forty years. I think this is more fundamental, you know, 174 00:12:05,200 --> 00:12:10,120 Speaker 1: in terms of social change to Chinese social psychology and 175 00:12:11,120 --> 00:12:17,240 Speaker 1: social sense. Who Chinese individuals are connected to families and 176 00:12:17,360 --> 00:12:21,640 Speaker 1: other people, and we now see that not just you know, 177 00:12:21,679 --> 00:12:24,800 Speaker 1: this probity, not a fact of the mentality that's thinking 178 00:12:24,880 --> 00:12:28,040 Speaker 1: of the younger generation. It also affects is the older generation. 179 00:12:28,160 --> 00:12:32,360 Speaker 1: How they So for example, I hear people talking about 180 00:12:32,640 --> 00:12:36,920 Speaker 1: now I mean retirement age. My responsiblity to my grandchildren 181 00:12:37,240 --> 00:12:41,160 Speaker 1: is not as of the older thinking. It's my responsiblity 182 00:12:41,200 --> 00:12:44,400 Speaker 1: to raise the third generation. They want to live there 183 00:12:45,040 --> 00:12:49,319 Speaker 1: more useful retirement life. So that's very, very different scenario 184 00:12:49,400 --> 00:12:52,800 Speaker 1: than whether we you know, the stereotypical of Chinese family. 185 00:12:54,000 --> 00:12:57,920 Speaker 1: It really is a remarkable change that has happened in 186 00:12:58,360 --> 00:13:01,360 Speaker 1: Chinese society over the last for you to fifty years, 187 00:13:01,760 --> 00:13:06,360 Speaker 1: Professor Side, one more question. Fertility is not just a 188 00:13:06,400 --> 00:13:09,920 Speaker 1: long term driver of economic growth, but you know, it's 189 00:13:09,960 --> 00:13:12,320 Speaker 1: something that you can also look at that can even 190 00:13:12,360 --> 00:13:17,080 Speaker 1: show whether a recession is coming. Is that is that right? Yeah? 191 00:13:17,120 --> 00:13:19,680 Speaker 1: So you know, that's a very very good example. In 192 00:13:19,720 --> 00:13:25,960 Speaker 1: the United States, the fertility decline into solvesand seven preceded 193 00:13:26,120 --> 00:13:29,720 Speaker 1: the recession of two thousand seven two soldand eight. So 194 00:13:29,800 --> 00:13:33,160 Speaker 1: that says something because it takes ten months to conceive 195 00:13:33,240 --> 00:13:36,160 Speaker 1: a baby, so that means the families and the mothers 196 00:13:36,280 --> 00:13:41,280 Speaker 1: knows quite a bit about economy before the recession even hit. 197 00:13:41,840 --> 00:13:44,640 Speaker 1: That's a great example. It's definitely something that we could 198 00:13:44,679 --> 00:13:48,480 Speaker 1: be watching to see when the recession will come or 199 00:13:48,520 --> 00:13:52,560 Speaker 1: when a recession will happen in any country. Professor cy 200 00:13:52,640 --> 00:13:55,120 Speaker 1: Young of the University of North Carolina, it's been a pleasure. 201 00:13:55,160 --> 00:13:57,200 Speaker 1: Thank you so much for being with us on Benchmark. 202 00:13:57,840 --> 00:14:10,880 Speaker 1: Thank you. Benchmark will be back next week. Until then, 203 00:14:11,040 --> 00:14:14,120 Speaker 1: you can find us on the Bloomberg Terminal bloomberg dot com, 204 00:14:14,120 --> 00:14:18,160 Speaker 1: our Bloomberg app, and podcast destinations such as Apple Podcasts, 205 00:14:18,280 --> 00:14:21,680 Speaker 1: Spotify or wherever you listen. We'd love it if you 206 00:14:21,760 --> 00:14:24,400 Speaker 1: took the time to rate and review the show so 207 00:14:24,480 --> 00:14:27,520 Speaker 1: more listeners can find us. You can also follow me 208 00:14:27,640 --> 00:14:32,119 Speaker 1: on Twitter at Scotland. Benchmark is produced by Toper Foreheads. 209 00:14:32,360 --> 00:14:36,280 Speaker 1: The head of Bloomberg Podcasts is Francesca Levy. Thanks for listening, 210 00:14:36,400 --> 00:14:37,240 Speaker 1: See you next time.