Cashing on the demographic opportunities

Demographic opportunities refer to favorable conditions that emerge during a country's demographic transition and are conducive to economic and social development. Demographic dividend, on the other hand, is an economic concept that refers to a country's economic growth as a result of the change in the population's age structure.

However, population opportunities do not necessarily translate into demographic dividends. Intermediary factors or transformation mechanisms need to match the economic and social decisions with the demographic condition in order to translate demographic opportunities into demographic dividends.

Different stages of demographic development create different demographic opportunities for economic development. Therefore, it is crucial to pay close attention to the changing demographic opportunities, instead of hastily assuming that China's demographic dividends will end soon.

Given the economic growth potential during the 14th Five-Year Plan (2021-25) period and the central leadership's efforts to realize the second centenary goal of developing "China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful", China can still turn many demographic opportunities into demographic dividends, including a large population, a massive working-age population, increasing human capital and population migration.

Although China's population growth rate has entered negative territory, its current population has reached its peak between 1.41 billion and 1.42 billion. As a matter of fact, the population will still be more than 1.4 billion in 2035 and over 1.3 billion in 2050.

Population decline affects demographics, because fewer births mean a declining workforce, accelerated population aging and population migration.

Even if India overtakes China as the world's most populous country, China will remain one of the two super-populous countries — China's population will still be more than 1 billion in the 2070s. At present, China accounts for about 17.8 percent of the world's population, but the figure will decline to about 13.5 percent in 2050.

By pursuing sustainable, high-quality development, increasing people's incomes and raising their consumption capacity, China can inject new vitality into the economy, move closer to realizing the second centenary goal and create new development opportunities for the world.

Despite its rapidly rising aging population, China is still in the early stage of population aging. Yet the change in the population's age structure because of the rapidly rising aging population will affect everyone.

Furthermore, although the working-age population is declining, the supply of labor is still abundant. For instance, China's working-age population aged 16 to 59 was 880 million in 2020 and could be 820 million in 2035. And even if its working-age population declines to 650 million in 2050, it will still be more than the combined working-age population of developed countries.

The number of people aged 60 or above will peak in 2054 to reach 520 million. However, the proportion of the people aged 60 to 69, who are in the early stage of aging, in the total elderly population will decline from 55.8 percent in 2020 to 40.9 percent in 2050.

In terms of demographic opportunities, in spite of the growing shortage of labor, labor productivity has improved and economic output capacity expanded, indicating that the development model is undergoing transformation. In other words, labor-intensive production is giving way to technology-driven, low-carbon production.

Also, since higher life expectancy has created new opportunities, measures should be taken to facilitate the participation of elderly people in various fields including economic activity. Such measures could include raising the legal retirement age and increasing flexible employment opportunities for the elderly.

It is also important that the authorities realize that human capital is becoming increasingly robust and has the potential of becoming a driving force for high-quality development.

In general, overall public health has improved, and while China's average life expectancy has reached 78.2 years, health indicators such as the infant mortality rate, under-5 mortality rate, and maternal mortality rate are lower than the average of middle- and high-income countries.

Besides, China has made exemplary progress on the education front, with the gross enrollment rate in higher education reaching 59.6 percent and the average years of education for people aged 15 years and above increasing to 9.9 years, and the number of people who have received higher education crossing 240 million, accounting for 17 percent of the country's population. Not to mention that the annual enrollment and graduation rates for higher education have exceeded 10 million.

All signs indicate that from a country with huge human resources, China is transforming into a country with massive human capital and talents. In fact, China is transforming into an urban society, promoting coordinated development.

As population mobility continues to increase, China's migrant population in 2021 reached 384 million, accounting for 27.2 percent of the total population. And the fact that the country's urbanization rate reached 65.2 percent in 2022 shows that the urbanization drive has intensified.

The rising urbanization and population mobility have not only boosted the domestic economy and promoted the optimization of demographic opportunities, but also helped accelerate the urbanization process, increase the labor participation rate, and raise labor productivity.

China's demographic opportunities include resource- and quality-based, large-scale opportunities, which are based on the country's huge population size, abundant human resources, enhanced human capital and increasing life expectancy. This mix of demographic opportunities will help lay a solid foundation for sustainable development in the new era.

The transition from quantitative economic growth to high-quality, knowledge-driven development will facilitate industrial upgrading, improve labor productivity, strengthen governance, increase employment and promote urbanization, which in turn will help deal with the aging population problem.

Moreover, by fully tapping into these new population opportunities, the Chinese economy can shift its reliance from "made in China" to "created in China" products and services, giving rise to new demographic dividends that will promote high-quality socioeconomic development.

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