The number of people of working age in China will decrease by almost 30 million before the end of this decade, posing a serious challenge to economic growth, an expert with a top think tank has predicted.
According to the World Bank, the country’s demographic dividend — when the largest section of society is of working age and the dependency ratio is low — has contributed more than 30 percent to the country’s rapid economic growth.
However, Cai Fang, director of the Institute of Population and Labor Economics under the Chinese Academy of Social Sciences, said that the dividend reached its peak in 2010.
"The number of working-age people has already started to fall," he said.
The last census, carried out in 2010, recorded 940 million people of working age — 15 to 59 — against the total population of 1.34 billion.
Cai estimates that by 2020 the number of people of working age will fall by as much as 30 million. He warned that a decrease in the labor force will come with a rising dependency ratio, lower savings ratios and diminishing returns, and eventually, slower economic development.
Cai said that, with the end of the demographic dividend, China’s annual economic growth is expected to slow to 7.2 percent between 2011 and 2015, and 6.1 percent between 2016 and 2020. GDP grew at an annual pace of more than 10 percent from 2006 to 2010.
Sectors such as manufacturing have attracted rural labor to urban areas. According to the Ministry of Human Resources and Social Security, there are 253 million migrant workers nationwide while Cai estimates they occupy more than one-third of jobs in cities and towns.
What’s more, he said, nearly 100 million residents still living in rural areas are already absorbed in non-agriculture sectors.
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