How many people are there in a country, how many work, how old they are – these are key demographic aspects when it comes to economic growth policies and challenges.
The high-income countries have been battling with the challenge of a shrinking working age population, while low-income countries, such as Pakistan, are wondering how to accommodate a booming youth population when real GDP growth is minimal.
For China, however, the problem is quite unique, with the country’s working age population expected to peak in 2013. Yet, while the population will age, the working age urban population will continue to grow. Here’s why.
Firstly, urbanisation in China will likely continue at an upward trajectory, peaking somewhere in the 2030s, according to the Economist Intelligence Unit. Therefore, even if the working age population will be shrinking, that in the urban centres will continue to rise for a good decade and more.
Though this means that the rural population will also decrease, this doesn’t pose much of a concern. “The fact that the primary sector only accounts for 10 percent of GDP (means) when it comes to maintaining economic growth, the urban workforce is really the only one that matters,” says the Economist Intelligence Unit.
Secondly, with more and more of the Chinese youth opting for higher education, the proportion of low-skilled factory job seekers will reduce. Though there will be less-educated rural migrants vying for these low-skill jobs, they will likely be of a higher age group.
Therefore, the real challenge that the Red Dragon is facing is to come up with white-collar jobs for the more educated youth of the country, so that the efforts towards greater educational achievement do not go into vain. At the same time, coming to terms with an aging, low-skilled workforce for menial factory jobs is also important.
But for the economic success that the country has been, these challenges are expected to be smartly tackled, as aptly summed by the Economist Intelligence Unit, “The Chinese economic miracle has pulled more than 200 million people out of poverty over the past 30 years. In the last 10 years, it has allowed 60 million children who would otherwise never have finished secondary school to do so. The next task will be to ensure that their studies have not been in vain.”