Monday, July 27, 2009

On the aging of Shanghai's population

The city of Shanghai is an exceptional metropolis, one of the largest cities in East Asia and since the 19th century a major commercial, financial, and cultural centre for most of that region. Shanghainese officials helped to guide China's initial opening to the world, and from the 1990s on Shanghai recovered with aplomb from its Communist-inspired isolation from the modern world. Don't believe me? Go to Shanghaiist, for starters. As Tania Branagan noted in The Guardian, Shanghai is also exceptional in China for its fast-aging population.

Shanghai authorities are urging eligible couples to have a second baby amid concerns about a lack of young workers to support its ageing population.
Family planning officials will make home visits and offer counselling and financial advice in a dramatic shift away from the 30-year priority of simply keeping the population down.

China's one-child policy already includes a series of exemptions – including for ethnic minorities and couples who are both only children. But in Shanghai, such families will now be actively encouraged to use what was previously seen as a privilege.

"We just hope more people can have a second child because for Shanghai, as a city which started family planning quite early, the process of ageing is fast," said Zhang Meixin of the Shanghai population and family planning commission. "If eligible couples have two children, it might help to relieve the pressure."

[. . .]

Earlier this year the US-based Centre for Strategic and International Studies warned that China would have more than 438 million over-60s by 2050. Each would have just 1.6 working-age adults to support them, compared with 7.7 in 1975.

The problem is particularly acute in Shanghai. Zhang said its fertility rate was 0.88 in 2008 – far below the national average of around 1.8 – and that which is needed simply to keep the population at the same level.
Fertility rates tend to drop with economic development. China's is still above that of Britain and many European countries.

As UNESCAP documents, the speed and extent of Shanghai's demographic transition is quite notable indeed.

Shanghai authorities had begun to advocate family planning as early as the 1950s. After several decades of efforts, Shanghai currently has the lowest fertility rate in the country. To the end of 1989, the fertility of Shanghai was 10.2 per 1,000, that is lower than 21.8 per 1,000, the fertility for the country as a whole in the same year. In the same period, the general birth rate of Shanghai was only 41.48 per 1,000, lower than the 79.53 per 1,000, the average for the country as a whole in the same period. The total fertility rate of Shanghai is 1.33 children per woman, and it is much lower than the 2.25 mean level for the country as a whole at that time. By the early 1990s, Shanghai's fertility level declined below the replacement level, and negative growth started since 1993. In 2000, CBR was only 5.3 per 1,000, the natural growth rate being -1.9 per 1,000.

This negative growth dates back as early as 1993, as described in this abstract of B. Gu's "Shanghai: a case study of negative population growth", published in 1995 in the Chinese Journal of Population Science.

In 1993 the crude birth rate was 6.50%, the crude mortality rate was 7.27%, and the natural rate of population growth was -0.78%. Shanghai achieved negative population growth (NPG) for the first time in 1993. NPG occurs when the number of births is less than the number of deaths. NPG occurs more frequently in developed rather than developing countries such as China. Shanghai had replacement or below replacement fertility since 1971, when the total fertility rate (TFR) was 1.84 children/woman. China's TFR reached 2.31 children/woman in 1990, whereas Shanghai's TFR of 2.36 children/woman occurred in 1969. In order to reach NPG in Shanghai, fertility was low for 20 years. NPG is reached through low fertility, reduced numbers of women of childbearing age, and increased numbers of elderly. China's age pyramid showed 28% of total population aged under 15 years in 1990 compared to Shanghai's 18%. 9% of China's population comprised people older than 60 years, while Shanghai's elderly amounted to 14% of total population.

Shanghai was already well ahead of the rest of China economically. Shanghai being ahead of the rest of China demographically isn't very surprising. The one-child policy may have simply accelerated the shift to below-replacement fertility, encouraged late marriage and childbearing while encouraging parents to invest heavily in their only child. Birth control has also been widely exercised, as evidenced by Shanghai's very high rate of condom usage. It goes without almost without saying that, as the UNESCAP brief goes on to note, has been quite rapid.

In 2000, the age group of 65 and above totaled 1.93 million, and the percentage of those 65 and above was 11.53%, the highest level in China. The speed of aging of Shanghai not only has exceeded that of Germany, but also Japan, a rapidly aging country in recent years. According to a projection, after a period of sharp increase of the aged population in the 1990s, the course of aging in Shanghai during the twenty-first century would possibly consist of three stages. In stage 1, the first decade of the new century, the speed of aging might become stagnated, while in stage 2, the second and third decade of the new century, Shanghai would experience another period of sharp aging. Nevertheless, in stage 3, approximately 4 or 5 decades after stage 2, the proportion of the aged would gradually remain stable at the level of 20% or so.

That may be optimistic. As observed in 1996, Shanghai's population growth has been driven primarily by migration.

A 1% sample survey was conducted in Shanghai during October 1995. Findings indicate that de jure population was 14.135 million people vs. 13.34 million people in 1990 (an increase of 0.795 million). Part of the increase in population (0.455 million people) during 1990-95 is due to changes in definition of the de jure population. In 1995, de jure means residents of the city for 6 months or more compared with the 1990 requirement of at least 12 months' residency. Natural population growth and net migrants accounted for 0.34 million of the increase in population during 1990-95. The birth rate was 5.75/1000 population in 1995 in Shanghai, or 81,200 births. The death rate was 7.05/1000 population, or 99,600 deaths. The natural rate of growth was a negative 0.13% or a decline of 18,400 population.

Men, Zhou et al in the Journal of Sustainable Development (1.1) noted in their article "Research on Prediction of Shanghai’s Population Development" suggest that without family planning another 7 million people would live in Shanghai, but also note that that while Shanghai's population can be expected to grow strongly thanks to migration, demonstrated also by this news report.

[T]he key factor which will influence the population scale and structure change in Shanghai is ab extra floating population. Ab extra floating population in Shanghai is 1,060,000 in 1988, which has already doubled to 2,510,000 in 1993. The fifth census data shows that, Shanghai’s resident population is 16,400,000 in 2000, among which, the ab extra floating population is 3,870,000, 23.6% around. Currently, floating population who live in Shanghai for more than half a year is about 1/4 of the permanent population.

Peng and Cheng, in their paper "Demographic bonus and the impact of migration: The case of Shanghai" make the good point that Shanghai's population aging and the abundance of labour in the countryside allows Shanghai and migrant-sending areas in rural China chance to benefit from a demographic bonus.

Internal migration can be a win-win strategy for both urban area and rural area and is the bridge to match the conditions of harvesting demographic bonus in both areas. In the rural area, even though exporting & losing young able labour force, is highly benefited due to decrease of unemployment pressure and receipt of remittance that has become a very important economic resource for the rural areas. In other words, the migration makes the use of rural surplus labour in production possible no matter how low of their marginal production is. On the other hand, migration helps urban area solve the problem of young labour shortage, and maintain development strength. We demonstrate that urban economy and urban pension system will take advantage of continued supply of young labour force from the rural area. On the whole, both sending and receiving areas benefit from the migration, as cities prolong the length of demographic window, while rural areas could harvest demographic dividend.

They also note that, "in the long term, neither the extreme higher migration scenario nor the extreme lower migration scenario could keep the window open. Considering the general trend of population growth in China and the unbalanced economic development throughout the country, Shanghai will still be under substantial pressure of immigration in the years to come."
In any case, replacement migration only works so long. A demographic bonus might be realized now, but can it be realized by (say) 2050, when 30 million or so people liive in Shanghai and there just isn't enough rural labour to draw upon?

See here for more information.


Aslak said...

I think you're correct to point out that Shanghai is in many ways a precursor for the rest of China. But the problem with attracting enough immigrants will obviously be much greater and probably insurmountable for China as a whole. When you have a population of 1.5 billion, where do you find enough immigrants to compensate once the population really starts declining? Especially since you have to compete with the West and other Asian countries for attractive workers.

Cicerone said...

In that case, I think it's good to look at the other asian countries, especially those who are far ahead in terms of ageing and fertility decline. Neither Japan nor South Korea or Taiwan have recieved mass immigration yet. If you look at the regional level in these countries, you see that the big metropolitan areas, especially the capitals, take people from the countryside to fill up their birth deficits. Because of population momentum, the countryside hasn't shrunken in population until now. Since 2005 however, the population decrease of the rural prefectures of Japan has accelerated dramatically.

Half of all South Koreans live in the Seoul Metropolitan Area, and the share is expected to rise further. Seems that the countryside will empty out totally.

And we shouldn't forget, that the demographic situation of Asian cities is a catastrophy even without a one-child-policy. Tokyo, Seoul and Hong Kong have a TFR of 1, Busan and Macao only 0.9.

Until now, none of the east Asian countries have used immigration to fill up their labor force. China could only use Africa as a reservoir, but only time will tell how Asia will react to population implosion.

Demograpy is exciting!

Randy McDonald said...

I quite agree that past a certain point you can't count on replacement migration for cities, even in China. Shanghai's doing decently for the time being despite its demographic situation, but there are only so many potential migrants.

Michael Carr - Veritas Literary said...

I'm not worried. The population is so vast that there will be a tight period for awhile, but even if China's population halves in the next century, it would still be double the current US population.

Which would be better, 600 million wealthy Chinese or 3 billion poor ones?

Cicerone said...

The best possibility would be 3 billion rich chinese. Why can't a China of 3 billion people perform better than a China with 600 million people? It's population growth and density, that encourages development, because only then there is the need for improvements.