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English>>China Society

Shrinking migrant population underscores necessity of policy change

(Xinhua)    16:45, January 20, 2016

BEIJING, Jan. 20 -- China's migrant population, people who leave their hometown to seek employment or education elsewhere, decreased for the first time in about 30 years in 2015, a change that surprised demographers and economists.

The country's migrant population dropped by 5.68 million to 247 million people at the end of last year, according to the National Bureau of Statistics (NBS).

"The decline means a negative growth of migrant workers, a group that accounts for the majority of the migrant population," said Li Xunlei, chief economist with Haitong Securities.

The negative growth came one year earlier than expected. Growth in the number of migrant workers entering the city has declined by 2 million per year since an annual peak of 12 million in 2010, Li said.

China's working-age population, which was defined as people aged between 16 to 60, fell by a record 4.87 million to 911 million in 2015, the fourth consecutive year of decline, the NBS data showed.

As labor, capital and technology are key to economic growth, Li forecast a dropping migrant population coupled with a shrinking labor force will slow economic growth.

An affluent and cheap labor force used to be conducive to China in attracting investment and boosting exports. But a decreasing labor pool has resulted in increased labor costs, prompting an outflow of investment.

Consumption, another driving force for economic growth, also dragged by work-age population decline, Li said, given labors, especially those who are between 25 and 45 years old, formed the main body of consumers, be it in real estate or auto consumption.

China's shift to a two-child policy did not help a lot so far, as NBS data showed the country's newborn population dropped 320,000 from 2014 to 16.55 million last year, instead of an expected rise, according to Huang Wenzheng, a demographer.

The situation is so grim that another demographer, Liang Jianzhang, recently suggested China should encourage women to allow routine artificial insemination, according to a China Daily report on Wednesday.

Li expected China to raise fiscal-deficit-to-GDP ratio to 3 percent or higher in 2016 from the 2.3 percent for 2015 in an effort to shore up growth. A 3-percent deficit ratio is normally considered a red line not to be crossed, but opinions favor a higher ratio as it enables the government to cut taxes, encouraging more production.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Kong Defang,Bianji)

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