Rising pension burdens and social security subsidies are also straining public finances – though trends remain uneven, analysts say
Research firm Rhodium Group estimated that the world’s second-most populous country, after India, could lose the equivalent of nearly France’s entire population over the coming 10 years.
In a nation of 1.41 billion people, a decline of this scale would weigh on labour productivity, consumption and social security, including in richer coastal provinces that have powered much of China’s growth over the past four decades.
“The country’s most developed provinces are seeing falling populations, which will impact overall consumption and the future productivity of the labour force,” wrote Allen Feng, associate director with Rhodium Group’s China markets research team and the report’s author.
“The impact on household consumption is obvious, but the larger problem for Beijing may be the hit to social security funds,” he added, noting that demographic pressures were also likely to contribute to weakening credit and lower interest rates.
Source: News - South China Morning Post
