ECX2630 - ECX5630 Chinese Economy and Global Business Assignment
population decline on China's long-term economic growth （Economic Impacts, Social Impacts, and Labor Market Impacts of a shrinking population in China, and Government Policies and Strategies）
Word limit: Maximum of 1,500 words (excluding references) but can be shorter
Details of Task
China is the world’s most populous country, but its population growth has been slowing down in recent years. In 2022, China’s population declined for the first time in 60 years, which could mark the start of a long-term decline – thereby affecting the country’s economy and business environment. Among others, the long-term economic impact of an aging population and a declining workforce are key concerns.
India is poised to overtake China to become the world's most populous country in April 2023, according to estimates by the United Nations.
China’s demographic trajectory is far from unusual. It is following in the path set by the rest of East Asia. Japan’s population peaked in 2008 and has been steadily declining since, with total population now falling by roughly half a million per year. Taiwan tipped over into negative growth in 2020, South Korea in 2021.
The objective of this assignment is to task our students with conducting in-depth research on the repercussions (impacts) of population decline on China's long-term economic growth, with Japan serving as a comparative reference. The areas of focus for this research include fiscal policy, export/import dynamics, consumption patterns, labour supply, productivity levels, and wages. Additionally, students are expected to provide a critical evaluation of public policies aimed at mitigating the adverse effects of population decline.
You may start an IMF Country Report on Japan which provides lots of facts and policies assessment. It is a long article but worth reading in full. You may then read the Pew Research paper to get yourself familiar with the key facts about China’s declining population and then compare and contract with Japan. The third article you may read is an article published by China Briefing – which emphasize the business impacts of China’s population decline. The WSJ article focused on its economic impacts and also suggested some policies to mitigate the adverse impacts of population decline.
IMF STAFF REPORT FOR THE 2019 ARTICLE IV CONSULTATION, Country Report: Japan, Feb 2020.
Pew Research Paper, “Key facts about China’s declining population”, Dec 2022.
China Briefing, “How China’s Population Decline Will Impact Doing Business in the Country, Feb 2023
Wall Street Journal, “China’s Shrinking Population Is Deeper Problem Than Slow Growth for Its Economy”, Jan 2023
You need to search for more reference to enhance your understanding of this broad issue. After reading these reference, you are required to write an essay to address the following issues (this is not a comprehensive list and please feel free to add any issue you want to investigate):
Economic Impacts: Explore how a shrinking population in China, similar to what Japan has been experiencing, can impact its economy in the long term. Discuss how a declining population can lead to a shrinking workforce, increased labor costs, reduced domestic consumption, and challenges in sustaining economic growth. Compare the economic policies and strategies implemented by Japan to mitigate the impacts of population decline and their effectiveness and discuss potential lessons that China can learn from Japan's experience.
Social Impacts: Analyze the social consequences of population decline in China, drawing parallels with Japan's experience. Discuss how a declining population can result in an aging society, increased healthcare and social welfare costs, changing family structures, and challenges in providing adequate care for the elderly. Explore the social policies and programs implemented in Japan to address the social impacts of population decline and evaluate their effectiveness. Discuss potential implications for China in terms of social policies and measures to mitigate the social impacts of population decline.
Labor Market Impacts: Investigate the impacts of population decline on the labor market in China, taking cues (xian suo) from Japan's experience. Discuss how a shrinking workforce can affect labor supply, demand, and productivity. Explore the potential consequences of a shrinking labor force on industries such as manufacturing, construction, and services. Discuss labor market policies, such as immigration, education and training, and retirement policies, implemented in Japan to address the labor market impacts of population decline, and evaluate their implications for China.
Government Policies and Strategies: Analyze the policies and strategies implemented by the Chinese government to address population decline, drawing comparisons with Japan's experience. Discuss measures such as family planning policies, immigration policies, and incentives for childbirth and childcare in both countries, and evaluate their effectiveness. Discuss potential lessons that China can learn from Japan's experience in terms of government policies and strategies to address population decline and promote long-term growth.
Future Outlook: Discuss the potential implications of population decline on China's long-term growth trajectory, taking lessons from Japan's experience. Analyze the challenges and opportunities that China may face as its population declines and ages and discuss potential strategies and policies that China can adopt to mitigate the negative impacts and promote sustainable growth in the future.