Perhaps one of the biggest ironies to come out of China for several decades is its population growth, or lack of it, which is now being mooted as a potential risk to its future growth.
In 2019 despite China’s overall population continuing to grow (going from 1.39 billion to 1.4 billion), the number of births was the lowest since the 1960s.
While many concerned with the state of the planet would welcome this, some see the birth rate falling below the rate of replacement threatening the ambitious growth targets set by the Chinese political leaders.
At one point in the 1990s the ‘fertility rate per family’ dropped as low as 1.2 children per family before bouncing back up to around 1.58 by 2017 but it is now rapidly trending back down with 1.49 in 2018 and 1.47 in 2019. This has/is occurring despite a move away from the 1 child family edict and the government now encouraging families to have two children.
The issue is that there is a rapidly ageing population in China and the concern is there will be a decline in the future work force. To achieve a stable population a replacement rate of 2.1 is the accepted figure with 2 to replace parents and 0.1 to meet ‘losses’ outside of the family.
Since 1970, the median age of China’s population has continued to increase from around 20 years to around 37 years in 2015. According to estimates from the United Nations, the increasing trend will slow down when the median age will get close to 50 years in the middle of the 21st century and will remain at around 50 years up to 2100. As New Zealand is aware the slowing in population growth and the ageing population is a double edged sword with the increasing cost of aged welfare being the other cost on growth. The issue China is looking to have to face is the same that many developed nations are facing. Japan probably has been at the forefront of this with its population falling to the point where it is now at where it was in 1990 and in the meantime the average age of the population is growing.
There are some important differences between a country like Japan compared to China. A big one is that Japan is already a wealthy country and although ageing many Japanese have invested offshore to provide income despite what occurs within Japan (remember the Japanese housewife).
China on the other hand, despite the rapid progress it has made over the last decade or so is likely to get old before it gets wealthy, hence why the concern it has around its population.
A feature which could be considered that both countries have is an aversion both culturally and institutionally to allowing in immigrants to bolster the workforce.
New Zealand is somewhat different to many other developed countries with a relatively high growth rate. However, in our case the increase is due as much to immigration as natural births.
For New Zealand’s agriculture exports the ageing populations of our trading partners come with mixed blessings. On the negative is the potential risk of lowering ability to pay the prices we desire for the products we sell. But with the ageing population generally comes a de-population of the rural sector and people to work the land.
Technology no doubt will take up some of the slack however most countries (I include New Zealand here) are operating well below their potential production levels due to a lack of labour in the primary sectors. COVID-19 has certainly brought it home here but even before the pandemic it was the case. This may create more demand for many land-based products.
But if the past has taught us anything it is that the future is virtually impossible to predict.
It could be that factories which produce ‘synthetic foods’ are the solution for the masses or some other left field event occurs. Perhaps even the African continent, an incredibly underperforming part of the world with huge potential gets it act together and fills in the gaps.
One thing we can be almost certain of (future pandemics aside) is that we will be feeding a lot more people in the future than we are today. Whether we get to the 10 billion or so as predicted by the UN or not, New Zealand’s produce should be in demand for some time yet.
We just have to hope that those that want it can afford to pay for it and the world still has enough sanity left to allow trade to happen.