A recent article in The New York Times addressed China’s declining population. The article noted that a fertility rate of approximately 2.1 children per woman is the minimum, without immigration, needed for the population to remain stable. Recent data suggests that China’s fertility rate has dropped to 1.2, among the lowest in the world. China is not alone in facing a fertility problem, but, given the country’s immense economic heft, the global implications are likely to be material and unpredictable.
The U.S. rate fell below 2.1 in the 1970s, slowly recovered to the replacement rate by 2007, then collapsed again after the Great Recession, to a current level of slightly less than 1.7.
Among the issues that should be considered are the implications for social services, such as Social Security and Medicare. As these are essentially Ponzi schemes and rely on a robust and growing group of younger wage earners to support a growing and aging senior citizen population, low fertility rates do not auger well for a viable and growing economy.
It is interesting to note that some of China’s current population woes can be, in part, attributed to the one-child policy, that began in 1970 and ended in 2016. Moreover, for a number of reasons, one of the consequences of the one-child policy and its implementation, was a material skewing to boy babies versus girls.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA