China has surged in recent years to become the world's second largest economy, behind only that of the United States. But while China looks like a juggernaut, it's not invincible. The nation is facing a huge run up in debt, as well as a brewing trade war with the US. Yet there's one threat looming above all else, a declining population. On the second of our two parts special on falling fertility rates, we explore why Chinese women are having barely any children and what that means for the Asian powerhouse. Welcome to Benchmark. I'm Scott Lanman and economics editor with Bloomberg News in Washington. On last week's episode, we spoke with author Elizabeth Patkin about declining birth rates in the United States and the struggles that people like her have faced trying to overcome fortil problems. This week, we're turning our attention to China. The country is facing perhaps the biggest threat to its future, a population that's aging and about to shrink. Cy Young, professor of sociology at the University of North Carolina at Chapel Hill, is here to tell us more. He's an expert in the demographics of his native country, China, Professor PSI, welcome to benchmark my pressure. First things first, when and why did China institute the one child policy? China institute the one child part say in seventy nine slash nighties exact time as a little b mulky, because it was a decision in process. The main reason, as announced the while to achieve to help achieve the economic development and go China at the time has gdpeople cabita at about two d dollars and the goal was to reach about eight hundred dollars by the end of century. That means by two thousand and by some calculation. The way to ensure that to reach to reach that a goal was to controice population within one point to billing. That was the main reason. And what was China's fertility rate in the nineteen seventies before that policy was instituted, So the policy was institute in nine ten years before that, China facility was around six kids per woman issue and what is it now today today is about one point five. That's you know, one point six, you know, given the number is not published, that's my guestimate, okay, So it's less than a third probably of what it was. Before the policy. No, okay, let me just make sure we understand this. Before the policy, if we refer to nine and seventy nine, China's fraternity was at two point seven kids per woman because it had already gone down in anticipation of the policy. Basically, no, no, no, So there was a major push by the Communist Party in the nineties seventies called the name of the policy is called later, longer and fewer. The idea was very simple, we're basically pushing for later marriage, longer bus interview, and fewer kids. And in rough free seven eighty years, China's fraternity declined from rough free six kids to less than three. By nine seventy nine, it was already at two point seven two point eight in that range. Okay, So, thinking about that effort that you just mentioned and the one child policy in nineteen seventy nine, how much would you say the one child policy is responsible for the decline in fertility to about one point five or one point six today, Like you said, not a much, you know, so as in the number, uh what the number we decided we discussed, tell us the much of a change, the major part of a change happened before the launch of the one child particy in ninety eight, not ninety eight, all right, And there was a little bit declined from two two point seven in ninety seventy nine to rough rate one point six one point five ish right now, But that is not it should not be entirely attribute to the one child policy. We know in between those thirty five forty years that China's socio economical change it was enomous. So are you saying that you know, basically because of the increased wealth, because of the expanding economy in China. You know, the economic reforms that were also instituted in the late nineties seventies, did that play a bigger role in helping to spur decline in the fertility rate than the one child policy by itself did. So one child policy certainly had an effect, but if we look in longer term, we know were observed across the world when you know, society urbanized, when women's education increased, that the general trend that the fratility would decline following those general social economic development development. We demographers like to call this as demographic transition. So yes, one child policy had an effect, but if we look at longer term, the social economic development probably prayed a more important role that maintained China's fratility at a lower level. So let's talk about China's population now. At the time the policy was introduced, the country's population was just a bit shy of one billion. Today it's around one point four billion. Where is the population going from here? What's your forecast for what is going to happen in the next forty years? Okay, so the forecast is very clear. I think the best forecast has been done on mostly widely slide of the forecast has been the u n S population projection. Basically, China's population would turn around in the next ten years or so, you know, from positive growth. Right now it's getting close to the uh so called zero growth, but it will quickly turn around in about ten years, and then we will see a very fast job from that until in what level might end up at or where until we don't know where the end is, you know, right now we can only see the job probably all the way to the end of this century. But it's pretty that India will probably surpass China's as the world's most populous nation. Oh yeah, yes, that that that that is a done deal because the fraternity and even China turned around very quickly that we demographers causes as a population momentum. Basically, it takes a generation for the you know, the younger generations to get into a productive age and for them to reproduce again. You know what, we have already saying that Chinese population in terms of a cohoscide decline has been there for the last twoty some years now. Professor in China changed the one child policy to a two child policy, meaning people were officially or everybody was officially allowed to have two children instead of just one. Has that affected any of the population projections or caused people to have more children? Uh? Not much. So the hope was by relaxing this policy, more people will have a second child and increasing the fraternity overall and basically turned around the population trajectory. Unfortunately, you know what, do the numbers are now in that the two sounds seventeen we did not see a major increase. Actually comparing to two sounds sixteen, we saw a decline in total number birth. So given that trend and given you know that all the other major chance in China including urbanization and increasing women's education label for participation all those things. I don't say any time soon that China's fratility will bump all the way above the so called replacement level, So that's not really having any effect. And we had an article on Bloomberg recently that China is considering ending even the two child policy and allowing families to have as many alternate as they want. If that happens, will that have any effect or or basically none like the previous changed it. So you know, we will see on the two sides. One on one side, because China is a big country with one point for a billing in terms of number bus, that should have have an effect. That's so that the policy is the new policy would increasing the opportunity for a family to have some family to have three even focuss but overall on the macro level in terms of total frateritory rate or the total number bus at the entire country level, it should not and I don't anticipate any major impact at least in the near future. Wow, So what will happen to China's economic growth if the population does start to decline like the u n IS forecasting. The country has been reporting GDP growth of close to seven percent a year in recent years, is that going to go down significantly? So I'm kind of I'm not an economist, it's it's always kind of fascinating and interesting, intriguing at least to me. That why we like to connect fratility directly to the economic growth. To me, it's a more secondary, maybe tertiary thing. But indeed, if we look at longer term this, you know, building up of fraturity low faturity would lead to eventual decline of growth rate. Partly, we know the population requires the label for us new labels coming into the market. Partly, and more importantly, it's the aging population. Right now, China is setting its retirement age at fifty five for women and sixty uh for men, and with data population continue to increase, that will create a huge drag for the entire economy. Do you think that might cause China to open up its borders much more to allow more grants or migrant workers to come into work in the country or live there. And it's I think given the China size, migration probably will not be considered as a priority for Chinese party makers. But China is indeed try to entice certain selective migration entire certain population to migrante into China. More likely China will have to relax its retirement age or delayed through time and age, oh train its population to into certain segments of the labor market. Now, just going back to the one child policy for a moment, I lived in China for three years, and it's quite something to see a whole generation of people that have grown up without siblings as only children. How has the policy, or just the decline in fertility, if you want to put it that way, how has that affected Chinese life and culture in the last forty years. I think this is more fundamental, you know, in terms of social change to Chinese social psychology and social sense. Who Chinese individuals are connected to families and other people, and we now see that not just you know, this probity, not a fact of the mentality that's thinking of the younger generation. It also affects is the older generation. How they So for example, I hear people talking about now I mean retirement age. My responsiblity to my grandchildren is not as of the older thinking. It's my responsiblity to raise the third generation. They want to live there more useful retirement life. So that's very, very different scenario than whether we you know, the stereotypical of Chinese family. It really is a remarkable change that has happened in Chinese society over the last for you to fifty years, Professor Side, one more question. Fertility is not just a long term driver of economic growth, but you know, it's something that you can also look at that can even show whether a recession is coming. Is that is that right? Yeah? So you know, that's a very very good example. In the United States, the fertility decline into solvesand seven preceded the recession of two thousand seven two soldand eight. So that says something because it takes ten months to conceive a baby, so that means the families and the mothers knows quite a bit about economy before the recession even hit. That's a great example. It's definitely something that we could be watching to see when the recession will come or when a recession will happen in any country. Professor cy Young of the University of North Carolina, it's been a pleasure. Thank you so much for being with us on Benchmark. Thank you. Benchmark will be back next week. Until then, you can find us on the Bloomberg Terminal bloomberg dot com, our Bloomberg app, and podcast destinations such as Apple Podcasts, Spotify or wherever you listen. We'd love it if you took the time to rate and review the show so more listeners can find us. You can also follow me on Twitter at Scotland. Benchmark is produced by Toper Foreheads. The head of Bloomberg Podcasts is Francesca Levy. Thanks for listening, See you next time.

China has surged in recent years to become the world's second largest economy, behind only that of the United States. But while China looks like a juggernaut, it's not invincible. The nation is facing a huge run up in debt, as well as a brewing trade war with the US. Yet there's one threat looming above all else, a declining population. On the second of our two parts special on falling fertility rates, we explore why Chinese women are having barely any children and what that means for the Asian powerhouse. Welcome to Benchmark. I'm Scott Lanman and economics editor with Bloomberg News in Washington. On last week's episode, we spoke with author Elizabeth Patkin about declining birth rates in the United States and the struggles that people like her have faced trying to overcome fortil problems. This week, we're turning our attention to China. The country is facing perhaps the biggest threat to its future, a population that's aging and about to shrink. Cy Young, professor of sociology at the University of North Carolina at Chapel Hill, is here to tell us more. He's an expert in the demographics of his native country, China, Professor PSI, welcome to benchmark my pressure. First things first, when and why did China institute the one child policy? China institute the one child part say in seventy nine slash nighties exact time as a little b mulky, because it was a decision in process. The main reason, as announced the while to achieve to help achieve the economic development and go China at the time has gdpeople cabita at about two d dollars and the goal was to reach about eight hundred dollars by the end of century. That means by two thousand and by some calculation. The way to ensure that to reach to reach that a goal was to controice population within one point to billing. That was the main reason. And what was China's fertility rate in the nineteen seventies before that policy was instituted, So the policy was institute in nine ten years before that, China facility was around six kids per woman issue and what is it now today today is about one point five. That's you know, one point six, you know, given the number is not published, that's my guestimate, okay, So it's less than a third probably of what it was. Before the policy. No, okay, let me just make sure we understand this. Before the policy, if we refer to nine and seventy nine, China's fraternity was at two point seven kids per woman because it had already gone down in anticipation of the policy. Basically, no, no, no, So there was a major push by the Communist Party in the nineties seventies called the name of the policy is called later, longer and fewer. The idea was very simple, we're basically pushing for later marriage, longer bus interview, and fewer kids. And in rough free seven eighty years, China's fraternity declined from rough free six kids to less than three. By nine seventy nine, it was already at two point seven two point eight in that range. Okay, So, thinking about that effort that you just mentioned and the one child policy in nineteen seventy nine, how much would you say the one child policy is responsible for the decline in fertility to about one point five or one point six today, Like you said, not a much, you know, so as in the number, uh what the number we decided we discussed, tell us the much of a change, the major part of a change happened before the launch of the one child particy in ninety eight, not ninety eight, all right, And there was a little bit declined from two two point seven in ninety seventy nine to rough rate one point six one point five ish right now, But that is not it should not be entirely attribute to the one child policy. We know in between those thirty five forty years that China's socio economical change it was enomous. So are you saying that you know, basically because of the increased wealth, because of the expanding economy in China. You know, the economic reforms that were also instituted in the late nineties seventies, did that play a bigger role in helping to spur decline in the fertility rate than the one child policy by itself did. So one child policy certainly had an effect, but if we look in longer term, we know were observed across the world when you know, society urbanized, when women's education increased, that the general trend that the fratility would decline following those general social economic development development. We demographers like to call this as demographic transition. So yes, one child policy had an effect, but if we look at longer term, the social economic development probably prayed a more important role that maintained China's fratility at a lower level. So let's talk about China's population now. At the time the policy was introduced, the country's population was just a bit shy of one billion. Today it's around one point four billion. Where is the population going from here? What's your forecast for what is going to happen in the next forty years? Okay, so the forecast is very clear. I think the best forecast has been done on mostly widely slide of the forecast has been the u n S population projection. Basically, China's population would turn around in the next ten years or so, you know, from positive growth. Right now it's getting close to the uh so called zero growth, but it will quickly turn around in about ten years, and then we will see a very fast job from that until in what level might end up at or where until we don't know where the end is, you know, right now we can only see the job probably all the way to the end of this century. But it's pretty that India will probably surpass China's as the world's most populous nation. Oh yeah, yes, that that that that is a done deal because the fraternity and even China turned around very quickly that we demographers causes as a population momentum. Basically, it takes a generation for the you know, the younger generations to get into a productive age and for them to reproduce again. You know what, we have already saying that Chinese population in terms of a cohoscide decline has been there for the last twoty some years now. Professor in China changed the one child policy to a two child policy, meaning people were officially or everybody was officially allowed to have two children instead of just one. Has that affected any of the population projections or caused people to have more children? Uh? Not much. So the hope was by relaxing this policy, more people will have a second child and increasing the fraternity overall and basically turned around the population trajectory. Unfortunately, you know what, do the numbers are now in that the two sounds seventeen we did not see a major increase. Actually comparing to two sounds sixteen, we saw a decline in total number birth. So given that trend and given you know that all the other major chance in China including urbanization and increasing women's education label for participation all those things. I don't say any time soon that China's fratility will bump all the way above the so called replacement level, So that's not really having any effect. And we had an article on Bloomberg recently that China is considering ending even the two child policy and allowing families to have as many alternate as they want. If that happens, will that have any effect or or basically none like the previous changed it. So you know, we will see on the two sides. One on one side, because China is a big country with one point for a billing in terms of number bus, that should have have an effect. That's so that the policy is the new policy would increasing the opportunity for a family to have some family to have three even focuss but overall on the macro level in terms of total frateritory rate or the total number bus at the entire country level, it should not and I don't anticipate any major impact at least in the near future. Wow, So what will happen to China's economic growth if the population does start to decline like the u n IS forecasting. The country has been reporting GDP growth of close to seven percent a year in recent years, is that going to go down significantly? So I'm kind of I'm not an economist, it's it's always kind of fascinating and interesting, intriguing at least to me. That why we like to connect fratility directly to the economic growth. To me, it's a more secondary, maybe tertiary thing. But indeed, if we look at longer term this, you know, building up of fraturity low faturity would lead to eventual decline of growth rate. Partly, we know the population requires the label for us new labels coming into the market. Partly, and more importantly, it's the aging population. Right now, China is setting its retirement age at fifty five for women and sixty uh for men, and with data population continue to increase, that will create a huge drag for the entire economy. Do you think that might cause China to open up its borders much more to allow more grants or migrant workers to come into work in the country or live there. And it's I think given the China size, migration probably will not be considered as a priority for Chinese party makers. But China is indeed try to entice certain selective migration entire certain population to migrante into China. More likely China will have to relax its retirement age or delayed through time and age, oh train its population to into certain segments of the labor market. Now, just going back to the one child policy for a moment, I lived in China for three years, and it's quite something to see a whole generation of people that have grown up without siblings as only children. How has the policy, or just the decline in fertility, if you want to put it that way, how has that affected Chinese life and culture in the last forty years. I think this is more fundamental, you know, in terms of social change to Chinese social psychology and social sense. Who Chinese individuals are connected to families and other people, and we now see that not just you know, this probity, not a fact of the mentality that's thinking of the younger generation. It also affects is the older generation. How they So for example, I hear people talking about now I mean retirement age. My responsiblity to my grandchildren is not as of the older thinking. It's my responsiblity to raise the third generation. They want to live there more useful retirement life. So that's very, very different scenario than whether we you know, the stereotypical of Chinese family. It really is a remarkable change that has happened in Chinese society over the last for you to fifty years, Professor Side, one more question. Fertility is not just a long term driver of economic growth, but you know, it's something that you can also look at that can even show whether a recession is coming. Is that is that right? Yeah? So you know, that's a very very good example. In the United States, the fertility decline into solvesand seven preceded the recession of two thousand seven two soldand eight. So that says something because it takes ten months to conceive a baby, so that means the families and the mothers knows quite a bit about economy before the recession even hit. That's a great example. It's definitely something that we could be watching to see when the recession will come or when a recession will happen in any country. Professor cy Young of the University of North Carolina, it's been a pleasure. Thank you so much for being with us on Benchmark. Thank you. Benchmark will be back next week. Until then, you can find us on the Bloomberg Terminal bloomberg dot com, our Bloomberg app, and podcast destinations such as Apple Podcasts, Spotify or wherever you listen. We'd love it if you took the time to rate and review the show so more listeners can find us. You can also follow me on Twitter at Scotland. Benchmark is produced by Toper Foreheads. The head of Bloomberg Podcasts is Francesca Levy. Thanks for listening, See you next time.