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China’s not making babies: This is why it’s bad for Australia

·5-min read
Made in China label on clothing. A man holds a child on his shoulders near a portrait of Mao Zedong. Australian iron ore being mined.
China's rapidly ageing population could cause a rise in global inflation (Source: AAP/Getty)

China has a rapidly ageing population as citizens opt not to have children, a decision which is at risk of causing major issues not just in the country but for the world.

Research Institute China Power said China’s population is growing old at a faster rate than almost all other countries.

“The effects of China’s 36-year one-child policy, combined with dramatic improvements in health care, have contributed to increases in life expectancy and decreases in China’s birth rate,” it said.

And, China is clearly worried about the situation, with the nation’s ruling party, the Chinese Communist Party (CCP) increasing the country's child policy to allow married couples to have up to three children.

But, allowing couples to have more children won’t solve the problem, as Chinese people aren’t keen to hop on the baby making bandwagon.

The World Health Organisation (WHO) predicts that one in three people in China are projected to be of retirement age by 2050.

And, a continuation of this could have devastating effects on Australia. Here’s why.

Surging inflation

China is Australia’s largest trading partner by far. China accounts for around 30 per cent of Australian trade, worth $170 billion a year.

If China’s population was to shrink in a significant way, that would mean fewer workers, less infrastructure, and less need to purchase things like Aussie iron ore.

But on top of that, the price of goods made in China would likely push higher. Look at almost everything you own and there is a good chance it has a ‘Made in China’ label on it.

China has had a stronghold on labour-intensive manufacturing for decades because it had a young, mobile workforce.

But if there aren’t enough young, willing workers to take over when the current generation retires, who will make everything?

It would likely land on other developing nations like India or Vietnam, but as those nations don’t have systems in place to take over from China it wouldn’t be the simplest handover, nor is it guaranteed.

How did this happen?

In 1949 the Communist uprising led by Mao Zedong successfully took over control of the country from the Nationalists after 20 years of civil war.

By 1958 economic disaster had struck the nation, with millions dying of starvation. With a rapidly growing population and lack of resources to support everyone, the CCP introduced the one child policy in 1980.

The controversial plan was rife with issues in terms of human rights, but it did reduce population growth - perhaps too well.

The one child policy was scrapped in 2015 as the CCP realised the ramifications an ageing population was going to have.

It was replaced with the two child policy, which just this week was relaxed even further to a three child policy.

Child restrictions no longer the issue

The relaxation of the rules doesn’t seem to matter much to the Chinese people, who simply say they aren’t interested in having children at all, let alone three.

The reason: kids cost too much, and there aren't enough government incentives to make it worthwhile.

May He, a 27-year old food worker in Chengdu, told the ABC that while money was a big factor, she was also worried about the mental strain that would come from raising a family.

She said the average salary for a person of her age and in her profession was around $1,300 a month and baby powder alone is around $100 a month.

"And then on top of rent and my personal expenses, I would also need to pay for early-child education for the kid — that's very expensive in China, nearly $2,000 for a semester," she said.

A poll on local Chinese media outlet Xinhua asked, ‘Are you ready for the three-child policy?’ with two options: ‘I’m ready, I can’t wait’ and ‘I won’t consider it at all’.

Of the 22,000 people who had responded to the poll, 20,000 said ‘I won’t consider it at all’. The poll was swiftly deleted.

So, what can China do?

According to the World Economic Forum, Singapore and Japan are the best placed countries to deal with an ageing population because it is not a new problem for either of them.

As such, both nations have put many programs and incentives in place to help boost baby-making.

Singapore is one of the most rapidly ageing societies in the world and its government has invested significantly in life-long learning initiatives to promote personal development and social integration.

It launched a program in 2014 to provide every citizen under 25 years old with a $500 credit to use on skills-based courses.

Singaporean universities also support their graduates in life-long learning and can take selected industry-relevant courses for up to 20 years from the time they graduate.

These programs mean Singapore has an active workforce which is always improving, the financial burden of having children is minimised and people are able to stay in the workforce longer through upskilling.

Japan is another rapidly ageing Asian country. Currently, about 25% of Japan’s population is above 65 and this will increase to 40% by 2060.

This shift has already started to slow down the Japanese economy, but it’s Government has a multi-prong approach to meet the needs of the Japanese population and boost economic growth.

In 2000, Japan implemented a comprehensive Long-Term Care Insurance, known as one of the most generous health insurance schemes in the world.

Not only that, but the Japanese Government has invested heavily in healthcare technology and in true Japanese style and is already working on creating care robots such as Paro the robotic seal.

This technology can not only meet the needs of the older generation but also create a new growth industry for Japan.

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