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Economic hurdles call for adjustments

By ZHOU LANXU | CHINA DAILY | Updated: 2021-05-12 07:46
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Census workers visit a home in Tancheng county, Shandong province, on Oct 31 to gather information for the seventh national census, the results of which were released on Tuesday. FANG DEHUA/FOR CHINA DAILY

Measures needed to tackle risks from falling birthrate, aging population

Despite demographic challenges, China's economy will remain on a solid growth track if the country meets its challenges properly with measures such as enhancing the quality of its human resources and reducing the cost of raising children, experts said on Tuesday.

Their comments came as the nation's latest census showed that the Chinese economy still has an abundant labor pool with a working-age population of 880 million, but risks have arisen from the falling birthrate and faster population aging.

"The country remains rich in labor resources and retains the advantage of a large population. But the working-age population has declined slowly year by year, making it necessary for the economic structure and technological development to make adjustments accordingly," Ning Jizhe, head of the National Bureau of Statistics, said at a news conference on Tuesday.

The country's working-age population, aged between 16 and 59, was 880 million in 2020, accounting for more than 60 percent of the national population of 1.41 billion and down more than 40 million compared with 2010, according to the seventh national population census carried out late last year.

"Although the total workforce may continue to shrink gradually, the proportion of the workforce with high levels of skill and knowledge is expected to grow, which will help the Chinese economy to further accelerate," said Channel Yeung, a market analyst at FXTM, a United Kingdom-based global trading platform.

According to Yeung, the decline in the labor force in recent years is mainly attributable to the shrinking of the low-skilled labor force, while the number of people engaged in higher-end industries, research work and the services sector is rising.

The NBS said the census showed that China's population has become more educated, as the number of people holding degrees from universities per 100,000 persons had risen to 15,467 in 2020, substantially higher than the 8,930 a decade ago.

As economic upgrading continues, the decline in the low-skilled labor force should not take a heavy toll on China's economic development, and the nation should take coordinated steps in industrial upgrading and the enhancing of its human resources, which will further buffer the pressure of a shrinking workforce and unleash growth potential, Yeung said.

His words echoed comments by Justin Yifu Lin, a senior economist and honorary dean of the National School of Development at Peking University, at a book release late last month.

Lin said the country could strengthen the quality of education to improve the productivity of its workforce in response to a shrinking working-age population, apart from raising the retirement age-60 for men and 55 for women, which is low by global standards.

He added that demographic changes are forecast to undercut the potential growth rate of China's economy by 1 percentage point at the most, leaving the nation's potential annual growth rate still high at 8 percent by 2035.

Luo Zhiheng, chief macroeconomic analyst at the research institute of Yuekai Securities, stressed the importance of reducing the cost of raising children to tackle the demographic impact on the economy, such as offering tax breaks or subsidies for parents and boosting the number of nurseries.

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