Chinese census encourages change in business policies and strategies – 20/05/2021 – Tatiana Prazeres

The census of China offers a new image of the country. Around the world, headlines have highlighted the size of China’s population – 1.411 billion, which will soon start to shrink. And the country’s fertility rate – 1.3 children per woman, well below the 2.1 needed to keep the population stable.

The news cycle has evolved, but the impact of the census in China is only just beginning. On this basis, public policies and business strategies are being rethought.

The survey showed a decrease in the workforce, which limits the growth potential of the country. The government’s response? First, increased productivity. There are fewer people in the workforce, but they can be more productive.

For this, technology takes weight in the equation. Education too. The census clearly shows that the population entering the labor market is more educated than the population leaving it. The percentage of university graduates has increased by over 70% over the past decade, reaching 15% of the population. The proportion is not large (in Brazil it is around 17%). It’s the jump that counts, and more will come.

Urbanization is another part of the toolkit for boosting productivity. Today, 36% of Chinese still live in the countryside. In the city, jobs are more productive. This is one more reason to facilitate the migration of the Chinese to China, something which is still under control.

There is a powerful tool to curb downsizing: raising the retirement age. Anyone who thinks that in China it is easy is wrong. Men still retire at age 60; women, at 55 or even 50 years old. The age does not reflect the reality of China today, where life expectancy exceeds 77 years. Reform is difficult, but the census encourages the government to touch the hornet’s nest.

In many countries, facilitating immigration would be one way to cope with a shrinking workforce. The foreign population in China is still very small – 0.1%, according to the survey. But that’s not where the government should be going, except in a very focused way on professionals with specific skills. Changing retirement rules may be, but making China a country of migrants is out of the question.

Of course, an increase in the fertility rate would help in the medium term. The irony is that, so far, the Chinese are liable to fines if they have more children than allowed – they can have two, not three. With the census, it gains in force from the opposite logic: subsidies or even financial bonuses for the largest descendants.

Not just the government, but businesses digest the results. They mainly seek to anticipate consumer trends.

The number of houses with one or two people was surprising. Chinese households are made up of fewer than three people – 2.6 on average. This leads companies to consider, for example, the size of real estate, vehicles and appliances, food packaging and furniture design.

The age group over 60 – 18.7% of the population against 13.3% in 2010 – is now receiving more attention. As consumers, they are more numerous – and richer – than in the past. Health services, for example, present a challenge for government but opportunities for entrepreneurs.

The changing demographic profile of China encourages adjustments in the direction of public and private agents. As interesting as the new photograph of the country is what changes it will bring. The conversation that matters most about the census begins now – when you stop talking about it.

LINK PRESENT: Did you like this column? The subscriber can release five free accesses from any link per day. Just click on the blue F below.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button