DTIC ADA515155: Graying Panda Shrinking Dragon. The Impact of Chinese Demographic Changes on Northeast Asian Security

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2009 2. REPORT TYPE 00-00-2009 to 00-00-2009
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Graying Panda Shrinking Dragon. The Impact of Chinese Demographic
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Changes on Northeast Asian Security
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National Defense University,Institute for National Strategic Studies,260 REPORT NUMBER
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China’s one child
policy has increased
dependency ratio of
elderly to youth
By maTT i sle r
China appears to be at
the edge of an historic
demographic transition,
setting the country on a
N Volunteers path to grow old before
U
it becomes prosperous.
—Global economist
Cliff Waldman1
Graying Panda
hrinking ragon
S D
The Impact of Chinese Demographic Changes on Northeast Asian Security
S
ince 1980, China’s “one child” strength and increased Chinese risk aversion while the over-80 population quadruples
policy has successfully slowed its will constrain China’s belligerence and stabi- from 1.8 percent to 6.8 percent.6
population growth and facilitated lize its demographic transformation. Together,
stable economic growth. By these forces foretell an aging, constrained, and Long-term Labor shortages
curtailing over 250 million births since its less belligerent nation after the mid-2030s. One of the most immediate economic
inception, however, the one child policy also United Nations (UN) population fore- consequences of the one child policy will
induced significant long-term consequences. casters expect China’s population to grow be decreasing numbers of laborers entering
According to China’s National Committee of only marginally until 2030, plateau at 1.46 the workforce, which threatens to increase
Population and Planned Birth, China faces billion until 2035, and then fall slightly to labor costs, constrain economic growth, and
three major demographic events during the 1.41 billion by 2050.4 Perhaps more signifi- increase immigration pressures. The UN
next 30 years: a peak of workers entering the cant than population growth reversal will forecasts that China’s working-age population,
labor market, a reversal of population growth, be rapid aging, as the median age will likely defined as those 15 to 59 years of age, will fall
and a rapid increase in the age of the Chinese increase from 30 to 41 by 2030, and to 45 by after 2010 as a percent of the total population,
population.2 Furthermore, China’s one child 2050.5 During this period, seniors will repre- and the absolute working-age population will
policy also created a significant and growing sent the most rapidly growing demographic decline after 2015.7 The shrinking labor pool
gender imbalance.3 These demographic group, as the proportion over age 60 triples will likely increase labor costs and could slow
changes promise to undermine China’s long- from 10.9 percent to 35.8 percent by 2050, or even reverse China’s economic growth.8
term stability by inducing labor shortages,
slowing economic growth, and increasing
pressure for internal migration and immigra- Lieutenant Colonel Matt Isler, USAF, wrote this essay while a student at the National War College. It won the
tion. Conversely, continued U.S. demographic Strategy Article category of the 2009 Chairman of the Joint Chiefs of Staff Strategic Essay Competition.
ndupress.ndu.edu issue 55, 4th quarter 2009 / JFQ 101
ESSAY WINNERS | Graying Panda, Shrinking Dragon
Global Exchange fhineirgdthuil siittnyrc,i1ao4l mliozeewd c mhnaaortraitocantleistr.y1i,5z aeCndod bn y- mtmhaieg lsermsa twaiolilnl lp ploirkoeels losyuf irfneecmsr, eafoalesseste, crion dmteempnesaitfniytdi oi nfnot ref orinmr aml i-
trary to such a normal demo- grant brides,23 and fuel demand for criminal
graphic transition, China faces networks that recruit and traffic brides. If
the challenges of economic this demand is not met, there is broad con-
growth, industrialization, and sensus that China could face increased levels
urban assimilation of a large of “antisocial behavior and violence [that]
rural populace simultaneous will ultimately present a threat to long-term
with its rapid demographic stability and the sustainable development of
transitions in the age and size Chinese society.”24
of its workforce.
In particular, China’s Long-term Growth in U.s. Power
Shrinking labor pool could slow or even reverse China’s
economic growth rapid rise in old-age depen- While China’s demographics threaten
dency during a sudden to constrain its economic growth, American
decline in the workforce demographics promise to support long-term
A shrinking labor force is likely to “could trigger an economic and political U.S. economic health. The UN forecasts
fuel internal demand for migration to meet crisis.”16 In 2025, China’s purchasing power that the U.S. population will grow strongly
the country’s labor needs, which could parity will surpass that of the United States from 285 million in 2000 to 409 million in
further destabilize China. Currently, the just as its last large “pre–one child” genera- 2050, largely due to immigration.25 Mean-
rural provinces account for virtually all of tion, born in the 1960s, begins to retire. This while, other major economic powers such
Chinese population growth, while the wealthy generation’s retirement will rapidly increase as Japan, the European Union, and Russia
provinces of Shanghai and Beijing effectively China’s old-age dependency burden just as face decreasing workforce populations and
produce zero population growth.9 As poorer increasing dependency ratios. According to
regions such as Tibet produce excess laborers this generation’s retirement a 2008 report from the Center for Strategic
and more wealthy coastal areas fail to produce and International Studies, the United States
will rapidly increase China’s
enough laborers, China faces long-term pres- “is the only developed nation whose popula-
old-age dependency burden
sure for internal migration.10 However, social tion ranking among all nations—third—will
just as China becomes a
benefits for migrant laborers are tied to their remain unchanged from 1950 to 2050. . . .
rural households, most lack insurance, and middle-income country [The United States] is also the only developed
the government considers the displaced labor- economy whose aggregate economic size will
ers the primary source of crime and a threat to China becomes a middle-income country.17 nearly keep pace with that of the entire world’s
public order.11 Because these economic and demographic economy.” As the U.S. gross domestic product
In addition to increasing pressure for transitions will occur simultaneously, China will likely expand steadily as a share of the
internal migration, China’s labor shortage “will face a developed country’s level of developed-world totals, China, Russia, Japan,
will likely fuel demand for immigrant labor old-age dependency with only a developing and the European Union will see their eco-
after 2015. Among China’s neighbors, Japan country’s income,”18 and may face social insta- nomic power relatively decreased.26 This will
and South Korea face similar workforce bility beginning in the mid-2020s.19 strengthen the relative power of the United
declines. Meanwhile, China’s less-developed States in the developed world to a situation
neighbors—Vietnam, Mongolia, and Growing Gender Imbalance mirroring its relative position immediately
Burma—should continue steady population China’s family planning policy also following World War II.27 The net effect of
growth past 2050.12 These three countries induced a significant gender imbalance that these changes will be increased U.S. influence
should offer a more favorable working-age will likely exacerbate
(15–59) cohort in 2020, and may be able to migration and immigra- Rush)
meet some of China’s labor needs.13 Regard- tion pressures. China’s David
less of how China’s labor needs are met, labor sex ratio balance, the Navy (
shortages promise to constrain economic number of males per 100 S.
U.
growth after 2020 and increase migration and females,20 grew from a
immigration pressures. healthy 106.3 in 1975
to an imbalanced 120.5
transitions in 2005.21 The imbal-
Furthermore, the simultaneous nature of ance is worse in rural
China’s economic and demographic transitions areas, where individual
presents a further source of internal instability. provinces have reported
“Normal” demographic transitions generally sex ratios over 137.22 This
Changing demographics could produce a less belligerent
follow a path from a high fertility rate, high significant population
China within several decades
mortality rate, and low income to a state of low (20–21 percent) of excess
102 JFQ / issue 55, 4th quarter 2009 ndupress.ndu.edu
ISLER
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Scott military may be forced Review 25 (January 1, 2004), available at <www.
U.S. Navy ( taoc toivuittsioeus,r icnev neostn ivni tal amUllNibss uWosuionrreil-sdms .Pceootrpmou-/lanaroteiroatnsh/ -1Fa0om1r3ee3cr1aic5sat-.1/u.hntimteld>-.s Staetee as-lso
high-tech capital
6 Chatterji et al.
such as robotics and
7 Waldman, 6.
unmanned systems, 8 Richard Jackson and Neil Howe, “The
and find labor through Graying of the Great Powers: Demography and
offers of citizenship Geopolitics in the 21st Century—Major Find-
for service. China may ings of the Report” (Washington, DC: Center
also be more willing to for Strategic and International Studies, May
participate in security 2008), 4, available at <www.csis.org/component/
Increased risk aversion could make China more willing to participate
option,com_csis_pubs/task,view/id,4453/>.
alliances with friendly
in security alliances
9 Waldman, 8.
developing countries.32
10 Ibid., 8–11.
China’s simul-
11 Alexandra Harney, “The Chinese Migrant’s
that will constrain China’s dominance of taneous industrialization and demographic
Mindset,” The Wall Street Journal, March 12,
Northeast Asia. transformation pose risks and opportunities
2009, available at <http://online.wsj.com/article/
for Northeast Asian security. While an aging SB123680436558899933.html>.
Increased Risk Aversion Likely population, shrinking workforce, and large 12 UN World Population Forecast.
In addition to looming labor shortages gender imbalance threaten to undermine 13 Waldman, 8.
and long-term economic challenges, the internal stability by inducing labor shortages, 14 Ibid., 4. The fertility rate is the number
effects of China’s one child policy include slowing economic growth, and increasing of children born per woman over her lifetime;
long-term social consequences that will pressure for internal migration and immigra- an average fertility rate of 2.1 births is typically
required for population replacement.
increase Beijing’s risk aversion and con- tion, continued U.S. demographic strength
15 Ibid., 2.
strain regional belligerence. As the policy and increased Chinese risk aversion will con-
16 Jackson and Howe, 11.
effectively curtailed the number of children strain China’s belligerence and act to stabilize
17 Ibid., 10.
in each family, it also increased the relative its demographic transformation. The net
18 Ibid., 5.
value of each child to the family.28 As China’s effect of these competing forces promises to
19 Ibid., 4–5.
population ages and begins to shrink, each be an aging, less powerful, and less belligerent 20 Marc Feldman, “Gender Imbalance in
young citizen faces the burden of caring for China after the mid-2030s. JFQ China,” Morrison Institute for Population and
his or her two parents and four grandpar- Resource Studies, Stanford University, October
ents.29 This increasing dependency, coupled 2008, available at <http://aparc.stanford.edu/
with an inadequate public pension system, events/sexratio_imbalance_and_gender_studies_
NOtEs
increases each child’s value to the family and in_china/>.
21 Ibid., 4; Shuzhuo Li, “Imbalanced Sex Ratio
1 Cliff Waldman, “China’s Demographic
at Birth and Comprehensive Intervention in
Destiny and Its Economic Implications,” Business
the effects of China’s one China,” 4th Asia Pacific Conference on Reproduc-
Economics, October 2005, available at <http://
child policy include long-term tive and Sexual Health and Rights, Institute for
findarticles.com/p/articles/mi_m1094/is_4_40/
Population and Development Studies, Xi’an Jiao-
social consequences that will ai_n15969911>.
tong University, October 29, 2007, 1, available at
increase Beijing’s risk aversion 2 Men Kepei, Guan Linlin, and Jia Lingyun,
<www.unfpa.org/gender/docs/studies/china.pdf>.
“China’s Future Population: Predictions and Pros-
and constrain regional 22 Ibid.
pects,” Population Review 44, no. 1 (2005), 9.
belligerence 3 “China steps up ‘one child’ policy,” BBC 23 Ibid.
24 Shuzhou, 1.
News, September 25, 2000, available at <http://
25 UN World Population Forecast.
news.bbc.co.uk/2/hi/asia-pacific/941511.stm>;
makes risk-laden military activities inher- Clay Chandler, “Little Emperors,” Fortune 150, no. 26 Jackson and Howe, 7–11.
27 Ibid., 8.
ently threatening to the long-term interests 7 (2004), 138–140, 143–144, 148.
28 Ibid.
of families. 4 Somnath Chatterji et al., “The Health of
29 Ibid.
Further exacerbating China’s risk aver- Aging Populations in China and India,” Health
30 Chatterji et al.
sion will be macro-level aging, which will Affairs 27, no. 4 (2008), 1052–1063. See also United
31 Jackson and Howe, 4.
likely force a reallocation of resources toward Nations (UN) World Population Forecast, 2006
32 Ibid., 12.
revision, available at <http://esa.un.org/unpp/>.
health care and social programs required
Population numbers published in this article
to sustain an aging population.30 Together,
reflect the “medium variant” of the UN popula-
family-level risk aversion and resource
tion forecast; the assumptions and methodology
demands for social programs will likely make
are listed at <http://esa.un.org/unpp/index.
China less willing to risk the future genera-
asp?panel=4>.
tion in war.31 To sustain its strength while
ndupress.ndu.edu issue 55, 4th quarter 2009 / JFQ 103