Technology can hedge against impacts of coming negative population growth

A research report on population and economic growth published by the Chinese Academy of Social Sciences last week projects that China's population will peak at about 1.44 billion by around 2028 and thereafter enter a persistent negative growth phase. Beijing News comments:

For a long time, China, the world's most populous country, has been plagued by worries about its growing population. But now, people have begun to worry about a possible decrease in the population in the near future.

The size of a country's population is the first element of economic and social development. The different structures of the population constitute an important basis for a country to choose its development model. For China, one of the most critical factors in its rapid development over the past 40 years has been to make full use of the comparative advantage of its demographic dividend.

Relevant research and analysis show that the contribution rate of China's labor force to economic growth has been about 26 percent in recent years. However, the population situation in China has begun to change. In 2012, China's working-age population showed a net decrease of 3.45 million for the first time, and the sharp drop in the birthrate has led to the arrival of the Lewis Turning Point.

True, encouraging child birth and delaying retirement can help to cushion the impact to some extent, which the government has already done. But with the demographic dividend development model that relies on a large amount of labor resources no longer applicable, in order to ensure the sustainable and stable development of the future economy and society, it will be the technology dividend that drives development.

Especially in recent years, with the large-scale application and development of internet technology, artificial intelligence and robots, the role of technology in economic and social development has become increasingly prominent.
However, we must be soberly aware that the transition from the demographic dividend to technology dividend is not a one-step process, nor is it a smooth process.

At present, there are many factors that restrict China's technological progress. There are internal factors such as the quality of the domestic labor force, the low commercialization rate of scientific and technological achievements, and the insufficient input of enterprises. There are also external factors such as trade protectionism.

The transformation of the country's growth mechanism from labor to technology, which many industrial countries have experienced and China is going through, is nothing to worry about, as long as the government can timely adapt its policies and priorities to the changing circumstances.