Separated by a mere 1200 miles across the East China Sea, China and Japan are both facing significant demographic challenges. Turning first to Japan, according to its just released census, the population of the world’s third or fourth largest economy, depending on how it is calculated, shrank from 128.1 million in 2010 to 127.1 million in 2015.
For many, the highlight of this population report was the fact Japan’s population declined for the first time since the census began in 1920.
However those who have been paying attention to the country’s key population variables have recognized for some time that a shrinking Japanese population was inevitable for two reasons. First, after hitting a high of 2.2 births per female in 1971, the birth rate in Japan (currently 1.4) has consistently remained below the 2.1 level which is necessary for sustained population growth.
The impact of this subpar pattern of natural increase has been exacerbated by what, up until very recently, can only be described as a very closed door immigration policy. As a result, Japan’s net migration rate over the past twenty-five years has averaged a mere 0.6 individuals per thousand. This is by far the lowest among the G-7 group of major industrialized countries where net migration has averaged 2.8 individuals per thousand since 1990. As a result of this persisting subpar pattern of population growth, the median age of the Japanese population, at 46.9 years, is the second highest in the world.
Faced with the spectre of a shrinking/aging population and a concomitant erosion in its standard of living, the Japanese government has recently (2015) adopted its Fifth Basic Plan for Immigration Control which tries to boost net migration by reducing some of the hurdles currently faced by foreign workers attempting to become Japanese citizens. Given that these measures were introduced less than two years ago, it is questionable whether they will help re-invigorate Japan’s aging population.
Although it has more than ten times the population of its eastern neighbour, China shares many of Japan’s demographic challenges. First, after reaching a high of 6.39 in 1965, China’s birth rate has trended steadily lower.
This decline was initially due the Great Chinese Famine which killed an estimated 15- to 30-million people between 1959 and 1961. However, it was exacerbated by what can only be described as a draconian one-child policy that was introduced in 1979.
Recognizing that the birthrate was dropping below the above noted critical 2.1 children per female and, like Japan, the population was aging, the government started to relax the one-child policy in 2013 and adopted a two-child-per-couple policy at the end of 2015.
In response to this slightly less restrictive family planning policy, the number of babies born in China jumped from 16.6 million in 2015 to 18.5 million in 2016. This is the highest number of births since 2000. While this surge in births was viewed by officials as a positive development, a number of observers consider that it was a one-time event triggered by couples who had postponed having a second child until the regulations permitted.
Further, a recent government survey of young couples revealed that a significant portion (75%) did not want a second child due to the high cost of child care and education.
Although China has attempted to attract more skilled foreigners in order to boost the quality of its workforce, the effect of these efforts has been outweighed by a steady outflow of Chinese nationals to other countries. As a result, the country’s net migration rate has been negative for the past thirty five years.
It is highly unlikely that China’s population will shrink in the near term like that of Japan. However, given the prospect for its birth rate to remain below the critical 2.1 and for it to continue to lose migrants to other countries, it appears likely that the Middle Kingdom, like Japan, will see the average age of its population trend steadily higher over the foreseeable future.