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In view of analysts at Standard Chartered, one of the biggest challenges facing the Chinese economy is deteriorating demographics and if China’s two-child policy continues, its working-age population (aged 15-64) will decline by an average 2.2mn per year from 2018-30, and 7.5mn per year from 2031-50.

Key Quotes

“As a result, China’s total labour force would drop by around 179mn, or 18%, from 2018-50, with a direct bearing on long-term economic prospects.”

“Our analysis suggests that even assuming all else is equal, a shrinking labour force alone could reduce China’s average annual economic growth rate by 1ppt from 2018-50, by when China aims to become a leading world power.”

“As a result, we argue that the time is ripe for China to fully abolish child limits. This would bring both demographic and economic benefits to China.”

 

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