A War to Lose If China Keeps Aging
by Xiyu Chen
Government sign stating: "To make your country stronger and your family happier,
please execute the one-child policy". Photo by Venus
"Once you have got meat, you will not feed your child vegetable," said Ping Zhou (pseudonym), a senior news anchor of China Media Group, who has been working as a producer in a business news program for 15 years. The words he said may sound weird to those from a Western society, but for Chinese people like Ping who has grown up in poverty, it is understandable: meat equals to the best of the best nutrition for children, it was extremely precious in the old poor days. However, this time, Ping is talking not about food but children.
Ping was born in 1980, the same year that Government of Beijing Municipality abolished "Rou Piao"(肉票), which literally means 'ration stamp of meat'. Though it has been seen as a sign of food sufficiency, many Chinese like Ping often suffered from food shortage at that time, especially a lack of meat, like pork and chicken.

In the year when Ping was born, the Chinese government implemented the world-known "one-child policy" in this massively populated country. Then, Ping became the only child in his family. Together with many of his peers, they became the first generation of single child in his country. Ping's parents worked in a hospital in Dalian, a big city near Beijing. Just like typical Chinese parents, they took care of Ping. "They helped me a lot, like buying the apartment and car for me. This is common in China," said Ping.

The mindset of "taking care of everything for children" has its root. In 1950s-1960s, when Ping's parents were born, China was a country with extreme poverty. When life gets better, the Chinese parents raise kids with a strong mentality of "compensatory". "If you grew up in poverty, you want your children to live a better life." Ping tried to generalize the parenthood philosophy inherited from his parents. Growing up in such an environment, Ping and his wife feel "compulsory" to give all their money, time and effort to their only daughter. "Because I was raised in this way, so it's natural for me think this way and act this way," said Ping.

He seems to be very aware of where did this mind-set come from, but what he doesn't realize is that this experience has deeply reshaped Chinese parents' mentality, which casts a dark shadow on China's aging population, that inevitably prevent China from standing out among the competition with other states.

Ping's Dilemma

In 2015, China changed its "one-child policy" into "two-child policy", thus couples with only one child can have their second one, according to the national congress. Ping wants a second child. "I want, of course. In Chinese culture, we always say 'More children, more blessings." China has been an agriculture country for thousands of years. Before industrialization, human power meant productivity. The more children one family had, the more capability it had to produce food, the more resistance it had to cope with risks like natural disaster and warfare.

What's more, since the healthcare system for the seniors is not well-developed in China, many old citizens rely on their young to take care of them when they are too old to live on their own. Thus, the more children you have, the more guaranteed you feel. Although the cultural and material reasons are strong and the policy barrier has been removed, Ping and his wife decided not to have a second child, after considering for more than one year.

The first reason is the economic consideration. Ping and his wife both work in the media industry, their annual family income amounted to 450,000 China Yuan (70,000 US dollars) which is fairly high in China. In Beijing, the average annual income per capita is 57,230 China Yuan (9,000 US dollars) in 2017. Even for a family like this, Ping thought they cannot afford a second child. He showed the account book of family spending on his daughter:

1. Tuition for middle school: 2520 CNY (≈400 USD) per month
2. Tutoring (English and Mathematics): 4100 CNY (≈650 USD) per month
3. Extracurricular activities (swimming and piano): 4618 CNY (≈730 USD) per month
4. Summer international exchange program: 28,000-40,000 (≈4400-6300 USD) per year
5. Nutrition diet: 1200 CNY (≈190 USD)
6. Clothing fee: 800 CNY (≈125 USD)
7. Miscellaneous fee: 1000 CNY (≈160 USD)

The spending on the 13-year-old girl costs Ping's family 230,000 CNY (≈35,000 USD) every year, which a half of the couples' income.

"This is all I can give to my daughter. I cannot give her more because I have to pay the house mortgage, the utilities… if I were richer, I will send her to an international school, where she can get well-prepared for applying to international universities, but international school is too expensive, the tuition cost around 250,000 (≈40,000 USD) for a year," said Ping.

The second reason seems to be more "Chinese characteristic". Ping and his wife "can't even imagine" cutting half of their spending and share it to a second baby. "It takes massive resources to raise a kid, you need money, time, effort… If there's a second baby, I have to lower the standard (to raise kids). It's not acceptable," said Ping.

The logic is not complicated: Ping's parents had a miserably poor childhood, so they want to "compensate" on their children. And they only have one child, so all the good stuff goes to Ping. Since Ping was raised up in this way, he gets used to this philosophy of investing all the family resources into one child and trying the best to make the child happy and success.

You may argue that Ping's case is not representative. Last year, the National Women's Federation and Beijing Normal University launched research about birth rate in China. The results of the survey showed that only 20.5% of the parents are willing to have a second child and 53.3% of them are unwilling to.

"The cost of raising a kid is getting higher but the time for the parents to take care of the children is becoming less (because young parents have to work), so the fertility rate is low. The second reason is that the majority of fertility is the 'only-child generation' and they just don't want to have kids," said Guomin Jiang, director of the Family Birth Guidance Department of Jilin Province.

The Birth Rate and the Thucydides Trap

The introduction of one-child policy began in 1978, the same year when Chinese government initiated the economic reform. Then, the economy of China started to rise and maintained an annual GDP growth rate at two-digits for more than 30 years.

Accompanied by the economic achievement, China gradually became a powerful country that has caught global attention: the most populated country with 1.4 billion people, the second largest economy with $12 trillion GDP (nominal), the second highest military power with expenditure of $215.7 billion in 2017. Many national power rankings view China as No.2 right after the United States, the Composite Index of National Capability (CINC) even put China at No.1.

According to "Thucydides trap", a political metaphor coined by American political scientist and Harvard professor Graham T. Allison, a new emerging power is bound to challenge the existing power, and the existing power will inevitably respond to this threat.

China still lags behind in many dimensions, compared to US, no matter economy size or military strength, political system or cultural influence, but many political scientists and international relation experts still believe that China is the biggest challenging power to the dominance of US and the confrontation between China and US is unavoidable.

It might be hard to witness a war, like the one between ancient Athens and Sparta, but the rivalry and confrontation between China and US is indeed at the stage, like the trade war with tariffs between Beijing and the Trump administration. When there's competition, there's result. Will China win the battle and replace the US as a superpower?

The Long-Neglected Frame

Many said "No", they don't think China can win over US. The most popular analyses in the Western world is based either on the economic or political frame. For economic frame, they think the development model of China is unsustainable due to the debt crisis, asset bubbles, inefficient state-owned-enterprises and financial system, etc., China is on the verge of economic collapse, not to mention competing with the US.

As far as political frame is concerned, they believe the political system of China is incapable of dealing with massive corruption, fragmented and infighting bureaucracy and social instability resulting from inequality of wealth distribution and lack of democracy, which may weaken the competitiveness of China. It's hard to say these arguments are wrong, but the dominant frames are ignoring something truly important: the demographic.

Demographic and Superpower

Superpower is a term to describe a state with dominant advantages in economy, politics, military and culture, etc. over any other state and being able to project its influence worldwide.

The concept of "superpower" originated in the early 20th century and was referred to three great powers of Britain, the Soviet Union (the predecessor of Russia) and the US; with the disintegration of the British Empire and its colonies, the end of the Cold War, the two powers of the United States and the Soviet Union were largely diminished and US became the only superpower on earth.

Undoubtedly, the significance of demographics has long been neglected when analyzing the reason why Britain and Russia failed and why US succeed in becoming and maintaining as a superpower.

Taking Russia as an example, it had population crisis for several times in the history. Since the beginning of the 20th century, there have been four population crises in Russia that marked with the dramatic shrinking of population. The first crisis took place in 1914–1922. The cause was the World War I and the civil war, the population loss was over 2 million. The second crisis occurred during the great famine of 1932-1933, severe natural disasters and state policy resulted in the unnatural deaths of millions of people. The third crisis occurred during World War II (1941–1945), which was triggered by the German-Soviet War. Although the Soviet Union won the war, it paid a high price of 27 million people. The loss of mass population, especially young people among them, had generated profoundly negative effect on the development of Russia.

This has also been demonstrated by other states' cases. "France went from having 20% of Europe's population during the reign of the Sun King, when it was Europe's preeminent Great Power with its largest armies, to being dwarfed by Germany (40 million to 67 million, and the Germans had twice as many young men) by the outbreak of WW1. Consequently, the French only managed to scrape out a Pyrrhic victory thanks to American intervention. And they would have been crushed in 1914 had Britain decided not to uphold its treaty obligations," wrote independent researcher Anatoly Karlin, whose major research interest focuses on political economy and demographics.

Rivalry between states is all-round. A larger population with healthy demographic will definitely bring advantages to its country. First, a larger population means a bigger market, which benefits the individuals, enterprises and the macro-economy, as it has been seen in the European Union. Secondly, a larger population generally generates more talents and ideas which yield human resource advantage and technology advantage, just look at India's achievement in the IT industry. Thirdly, a larger population represents stronger military resistance. China would be defeated by Japan during World War II if not having a massive population.

However, to achieve all those advantages, a prerequisite must be met: a young demographic structure. Even for a country has a large population, if the demographic is too old, it will gradually ruin the future of a country.

Japan's case perfectly illustrates this point. Now in Japan, there is 1 person aged more than 65 years old in every 4. The chart from the United Nations shows how fertility correlates with economic growth: the birth rate goes down, the economic growth follows down.

After taking a closer look at Russia, France and Japan's cases, it's not hard to find that having a positive birth rate is a necessary but not sufficient condition for being a great power.

China's Dilemma

When announcing the two-child policy, the state-run-media Xinhua News Agency cited pundits' forecast, saying that the population may peak at 1.45 billion in 2030 or so.

However, the expected baby boom didn't come. According to the World Bank, the total fertility rate (TFR) of China is 1.57, lower than US (1.84) and India (2.40) while the world average is 2.45.

In fact, the TFR of China has been lower than 2 since 1993. That is to say, China is already one of the countries with the lowest birth rate in the world, and it will face a shrinking population instead of a population explosion in the future.

"China faces the serious challenge of population aging in the future, which will hamper economic development and social strength," said Fuxian Yi, a demographic scientist at the University of Wisconsin-Madison.

According to the New York Times, Fuxian Yi once made a speech in China: "Because of China's birth control policies beginning in 1980, there's no way its economy will overtake that of the United States. Growth is already beginning to fall amid a distorted demographic structure."

The Chinese government maybe worried as well. Last year, China's National Bureau of Statistics deleted some key demographic figures in its annual book without telling the media and public why they did so. South China Morning Post, a Hong Kong newspaper, covered that "The statistics agency's number, which indicated a fertility ratio of 1.05 in 2015, ran counter to an estimated fertility rate of 1.6 from the National Health and Family Planning Commission."

Japan and South Korea share similar social norms and culture backgrounds with China, and they have finished modernization and economic rise years ahead of China, so they're often deemed as perfect reference to forecast the demographic trend of China. Unfortunately, both countries are among the lowest birth rates in the world.

On the other hand, China has been doing experiment for more than 30 years in Yicheng (翼城), a small county in North China. Citizens here are allowed to have their second child since 1985. However, the result of this 30-years-experiment is not optimistic at all, its TFR is even lower than the national level, according to local government official Caishan Feng.

Meixiong Yao, a demographer from China predicted that after 2020, China will find it difficult to recruit workers, get married, and provide care service for the elderly. In 2020, the population born during the baby boom in the last century will get old. Both families and the society will face the pressure of insufficient pension. "Especially after 2030, the labor force to support an old will be reduced from the current 5 to 2," said Meixiong.

The birth rate is crucial to China's competition with US. "Population size doesn't matter much if your goal is to live as a small, comfy, unambitious Switzerland or Singapore. But a large population, along with a sufficiently high IQ, remains of sine qua non being a Great Power or superpower," said Anatoly Karlin.

It's hard to predict the superpower for the next century since everyone is talking about the power shift from west to east, from US and Europe to Asia and Latin America. But if China cannot tackle its demographic crisis, if China cannot boost its fertility and manage to make its population younger, the rivalry with US will be tough and the new power is unlikely to win.
About the author: Xiyu Chen used to work for China National Radio as a business reporter, now also known as China Media Group, the biggest state-owned broadcast media conglomerate in China. Before that, he got a bachelor's degree in Business Journalism from Central University of Finance and Economics in Beijing and completed an internship at Financial Times (Beijing) and Tencent. After receiving the chance to study globalization and international relations in Europe, he started to form interest in working on "Thucydides trap", and more specifically, China-U.S. confrontation from an economic and technological perspective.

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