China population: Beijing hoping for ‘appropriate’ 2021 fertility level as demographic challenges mount

Premier Li Keqiang said that China would ‘work to achieve an appropriate’ fertility level while delivering the government work report at the National People’s Congress
Last year, the national social security fund, which includes pensions as well as insurance coverage for medical, unemployment and work-related injuries, ran at a deficit of 671 billion yuan (US$104 billion)

Two Sessions 2021 (Lianghui)

Sidney Leng

Published: 6:31pm, 5 Mar 2021

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China’s perceived vague call for an “appropriate” fertility level this year is viewed as the best the government could say while it awaits the preliminary results from the population census in April with the country facing a growing demographic challenge.

Chinese Premier Li Keqiang on Friday said that China would “work to achieve an appropriate” fertility level while delivering the government work report at the National People’s Congress in Beijing.

Li also confirmed China would gradually extend China’s retirement ages, while also ensuring 95 per cent of its citizens would have access to a basic pension.

For more than four decades, China’s retirement age has remained unchanged at 60 for men and 55 for women, although it can be earlier for women in blue-collar jobs.

If the goal is set too low, it’s easy to misread the policy. If it’s set too high, it will be a joke if it sounds impossible to accomplish

Yi Fuxian

China is also planning to build more facilities for the elderly and children over the next five years, explained Li.

“If the goal is set too low, it’s easy to misread the policy. If it’s set too high, it will be a joke if it sounds impossible to accomplish,” said Yi Fuxian, a senior scientist at the University of Wisconsin-Madison.

China conducted its seventh national population census in November and December, but the preliminary results are not yet available.

Concerns are rising about China’s population, with data released by some provinces and cities for 2020 showing dramatic declines in the number of newborns compared to a year earlier.

The number of newborns recorded in the country’s household registration system also declined 15 per cent last year, although this is not China’s official birth rate, which has also been delayed due to the census.

An “appropriate” level of fertility in 2021 could still mean reaching 2.1 births per woman, according to He Yafu, a veteran analyst on China’s population.

This level of births per childbearing female means the population would still increase as the mother has produced enough children to replace herself and her partner.

We will implement the national strategy for addressing population ageing, and improve the population services system with a focus on elderly care and child care. We will work to achieve an appropriate [fertility level]

Li Keqiang

“We will make all-round efforts to build a healthy China. We will develop a strong public health system, carry out extensive public fitness activities, and raise the average life expectancy by one year,” said Li.

“We will implement the national strategy for addressing population ageing, and improve the population services system with a focus on elderly care and child care. We will work to achieve an appropriate [fertility level].

In the national population development plan for 2016-30 issued by the State Council five years ago, Beijing proposed a fertility rate of 1.8 for the decade from 2020-30.

But China’s fertility rate fell below 1.5 in 2019, a figure which was helped after China relaxed its one-child policy at the start of 2016.

The central government said late last year that it wanted to embrace a more “inclusive” birth policy and improve its care services for children and the elderly.

In a more detailed version of the 14th five-year also released on Friday, Beijing said it planned to build 100 child-friendly cities and boost the availability of day care services for children under the age of three to 4.5 children for every 1,000 people in 2025, up from the current level of 1.8.

Is China concerned about its population?

Apart from increasing the coverage of basic pensions, the government also said it would increase the number of beds in 1,000 publicly owned nursing homes and convert around 200 training centres into elderly care facilities.

These promises mean more government investment in the coming years to prevent the economy from slipping back because of its rapidly ageing population.

Last year, the national social security fund, which includes pensions as well as insurance coverage for medical, unemployment and work-related injuries, ran at a deficit of 671 billion yuan (US$104 billion), the first shortfall since the Ministry of Finance started including the fund in its annual budget report in 2013.

The fund’s revenue fell by 13 per cent from a year earlier, mainly due to the government’s move to reduce employers’ social security contributions to help the economy recover from the coronavirus pandemic.

Payouts from the fund also rose by 5.5 per cent, meaning by the end of 2020, the fund’s outstanding balance stood at slightly more than 9 trillion yuan (US$1.4 trillion).

Local governments have relied heavily on fiscal support of nearly 30 per cent from the central government to enable them to meet their social security payout obligations.

In 2021, the level of subsidies from Beijing will rise by 7 per cent from the 2020 level, according to the budget report.

However, given the rapid recovery of the economy, the ministry expects the fund to have a positive balance of 276 billion yuan this year.