China has reached a turning point in recent history. In 2018, the country's birth rate fell for a second year running, to 15.23 million newborns — 2 million fewer than the previous year. The last time the birth rate was that low was in the 1960s. In the past five years, the number of people aged between 16 and 59 has decreased by 20 million.

At this rate, the active population will have fallen from a high of 925 million in 2011 to 700 million by 2050. Every third person in China will be a pensioner. The average life expectancy in China is 77 and the country has a per capita GDP equivalent to that of Bulgaria.

It will pose a huge challenge to China's economic and social balance. A smaller active population will have to provide for an increasingly large elderly population. The health and social system, which is already deficient, will come under more pressure.

No baby boom despite end of one-child policy

It is unlikely that the trend will be reversed. In 2016, the Chinese government tried to introduce counter-measures by relaxing the one-child policy imposed by the reformer Deng Xiaoping in the early 1980s, who argued that too many children were a threat to the country's general wellbeing.

Wellbeing has now improved in China, and couples are allowed to have more than one child, but there has not been a baby boom. In the capital of the populous province of Shandong, Qingdao, only 81,000 children were born between January and November 2018 — 21 percent fewer than the year before.

A German newspaper recently argued that China's population seemed to be losing faith in the future, but this is not the reason for the absence of a baby boom. The reason is that many young Chinese people think that careers are more important. So parents prefer to work and grandparents often do not want to have to deal with more than one grandchild.

It is also becoming more expensive to have children, as the cost of apartments, health and education rise. So many families prefer to focus their attention on one child. Many parents were themselves only children so this is the model that they know.

Moreover, there are few elderly people's homes so children often have to care for their parents. In addition, because the one-child policy led to a gender imbalance in China there are fewer women of childbearing age. On top of this comes the fact that many people are leaving the countryside to live in urban centers where there is little time and space for children. In some rural areas, the birth rate has fallen by a third. 

Similarities to other industrialized countries

China remains the most populous country on earth with a population of 1.4 billion. India is just behind with a population of 1.34 billion. In 2029, China is expected to reach a high point of 1.49 billion before the population begins to shrink. It is a normal development that almost all industrialized countries have witnessed, including China's neighbors South Korea and Japan. They are doing extremely well economically; one reason being that elderly people now consume more than they used to.

China could compensate for its dwindling population by enabling more immigration, as the US, Australia and Germany have done, at least to a certain extent. For now, the country remains relatively homogeneous and isolated but it is opening itself more to the world.

The "New Silk Road" project could also have a positive influence. More and more people are moving to China from abroad, especially from Africa. However, it remains almost impossible to obtain Chinese nationality if you are European or African.

Last year, the state newspaper, the People's Daily, wrote: "Giving birth is not only a family matter but also a national issue." However, such headlines cannot change much.

The only option the Chinese government has is to create more incentives so people choose to combine career and family. In this regard, it can learn a lot from Western industrialized nations and introduce measures such as flexible working hours, paid parental leave, child support or tax incentives. Such policies are currently being discussed in China.

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However, in a very competitive society it is not easy to convince companies to introduce child-friendly measures. What's important is that the state prevents companies from simply employing fewer women.

Senior care will pose a challenge

One way of lightening the load would be develop better care for the elderly. In a recent speech, Chinese President Xi Jinping called for its systematic development.

China also needs better insurance policies. According to China's National Development and Reform Commission (NDRC), the market will soon be opened up to private investors, both Chinese and foreign. It might be possible to hire care-workers from abroad if there are not enough Chinese applicants.

It is also important to create financial incentives so that young people opt for this career path. It should be easier, too, for employees to take leave so that they can look after their parents. In large cities, there are already networks of neighborhood care stations which are funded by the state. However, often the provision of care is limited to consultation and taking people's blood pressure and temperature.

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The government has also put funds into developing robots and machines that can provide care. This could take some time however. But they might be a key solution in future generally. As factories become more automated fewer workers will be needed in some areas. Those who are no longer needed might go back to their homes in rural China and it does not have to be a problem: The factories of the future will be able to create economic growth with fewer staff.

Frank Sieren has lived in Beijing for over 20 years