China facing economic crisis as population peak nears, PBOC adviser says
- Consumption set to slump after population tops out in 2025, says Cai Fang, a member of the central bank’s monetary policy committee
- Beijing must ‘increase labour participation and social security benefits’ for the elderly to shore up consumer demand, he says
China’s population is set to peak in just four years’ time and the milestone will be marked by a significant downturn in consumer demand, an adviser to the central bank has warned.
“We need to pay attention to the impact of demographics on future consumption.”
Cai, who joined the central bank’s advisory body last month after retiring from the Chinese Academy of Social Sciences, said the number of Chinese of working age had been in decline since 2010, which had mainly affected the supply side of the economy.
His comments came after the PBOC recently published a paper highlighting the imminent problems caused by China’s falling birth rate, and calling for further liberalisation of the two-child policy and an increase in support measures for women to encourage them to have more babies.
The paper, which was published ahead of the release of China’s latest census later this month, said the proportion of elderly people among the total population rose to almost 13 per cent in 2019, from 7 per cent in 2000, and could hit 14 per cent by 2022.
