China’s worldwide competition with the United States regularly captivates global attention—as with Washington recently shooting down a Chinese spy balloon, ongoing tensions over Taiwan, Beijing’s support for Russia’s war in Ukraine, or the U.S. administration’s ban on the export of advanced semiconductor chips to China. But the country’s greatest challenge might now come from within—in its shrinking population. In January, Beijing announced that China’s population had dropped by about 850,000 from 2021 to 2022, with the total number now at 1.41 billion. Outside demographers have estimated for years that the number of people in the country had been declining, regardless of authorized statistics from the Chinese government. Now that it’s official, what are the implications?
Scott Rozelle is an American development economist, a researcher at the Freeman Spogli Institute for International Studies at Stanford University, and the director of the Institute’s Rural Education Action Program, who’s spent several months a year working in rural China over the past four decades. To Rozelle, what’s happening to the country’s population will inevitably bring a number of clear challenges, at home and abroad—not least in Beijing’s economic capacity to care for an aging generation with fewer children. But “the biggest problem China has that no one outside the country really knows about” is most directly confronting its younger generations—in the more remote areas where the majority of Chinese people live. And in time, Rozelle says, their problem will be China’s.
Eve Valentine: What do we really know about China’s declining population?
Scott Rozelle: We know it’s real and serious. Birth and fertility rates are falling fast—birth rates being births per thousand people; fertility rates, births per woman of childbearing age, which is a clearer indicator of what’s going on. And looking at the World Bank‘s numbers, the overall fertility rate in China is down from about 1.7 to about 1.3 in six years.
But then there’s the question of where it’s happening. Western press coverage tends to focus on the urban picture: Most urban families have one kid; many have none. Of course, this is a big part of the picture as a whole. But the majority of China’s population isn’t falling in the cities; it’s falling in rural areas.
More than 60 percent percent of babies in China are rural babies. And in rural China, the fertility rate is down to about 1.5 from about 2.5 just 10 years ago. My research group, the Rural Education Action Program out of Stanford, does a lot of work on rural families, and if you look at a typical sample of them, around 65 percent have two kids; 30 percent have one kid, without planning to have another; and around 5 percent have three kids or more—very few anymore.
At the same time, there was a longstanding historical preference among rural Chinese families for having boys to work on the farm, and that’s almost entirely disappeared. It’s true that there’s still a certain cultural bias favoring boys, but people are increasingly happy with girls too. When you speak with a family that has two girls, you’ll often hear, It’s great, we’ll never have to pay a bride price!—the ceremonial tradition of a groom’s family paying his fiancé’s.
Now, I don’t know what the bride price is going to look like 20 years from now, as the greater number of girls in the population get to marrying age. But these days, the bride price is very, very high—on account of the sex-selection problem from 40 years ago: Between 1980 and 2015, China imposed a one-child policy across the country, which brought an era of sex-selective abortion that skewed the rural population as a whole significantly male.
Valentine: So what’s driving the fall in rural fertility rates now?
Rozelle: After the end of the one-child policy, the main drivers have been the increasing cost of having—and educating—children and now the decreasing need for them in rural labor.
Western press coverage tends to focus on the urban picture: Most urban families have one kid; many have none. Of course, this is a big part of the picture as a whole. But the majority of China’s population isn’t falling in the cities; it’s falling in rural areas.
In urban areas, it’s very expensive to raise kids, who haven’t historically been so essential to family economies there as they have been in rural areas. But in rural areas, you don’t really need kids to farm anymore. Chinese farming is almost totally mechanized now. So while the government in Beijing ended the one-child policy eight years ago, the incentive to have more children has actually diminished since.
Rural parents, meanwhile, now tend to want their kids to be educated and to end up working in an off-farm sector. Which means a high-school degree, ideally a college degree, and ultimately a white-collar job. Which in turn means incurring some of the considerable expense urban parents experience in educating their children. And which ends up meaning that more rural parents want fewer kids—to be able to focus as much of their resources as possible on those they have.
Valentine: How do you understand the impact of these demographic changes?
Rozelle: They certainly raise a lot of questions. The most obvious is, are there going to be enough people in the labor force? Now, I expect that in an era when we’re seeing more and more applications of robots, automation, artificial intelligence, and so on, we’ll plausibly end up seeing less and less need for human labor across sectors—in construction, for example, or manufacturing. We know technology is going to affect the demands on labor in these industries drastically. But exactly how is a question.
A deeper question is how China is going to develop economically overall—specifically, how high Chinese incomes will get in terms of GDP per capita by the time today’s working adults become elderly. China has a very, very weak social-security system, and taking care of the elderly is the main thing they need it for. So with an ongoing population decline, supporting that system will depend on driving GDP per capita up.
There are related questions about what China’s global stature will look like over the same time span: What will Beijing be in a position to spend on military expansion? What will it be in a position to spend on its Belt and Road Initiative?—the global infrastructure-development strategy it’s used to enhance its influence around the world. If you look at what China spent on Belt and Road in 2022, it’s already about a tenth of what it was three years prior.
But the biggest issue these changes are driving is the biggest problem China has that no one outside the country really knows about—a widening gap in what social scientists call human capital between urban and rural children.
In plain terms, this means two things: One is that China’s education system isn’t adapted to the challenge of preparing rural kids for life off the farm; it’s not training them for the emerging economy. But more fundamentally, rural Chinese families aren’t adapted to preparing their kids for the challenge of integrating into the education system in the first place.
The biggest issue these changes are driving is the biggest problem China has that no one outside the country really knows about—a widening gap in what social scientists call human capital between urban and rural children.
Valentine: How so?
Rozelle: What we find across the country—and it doesn’t matter if it’s East China, or Central China, or West China, or the semi-rural areas around big cities—is that there’s a huge problem with cognitive development among rural kids. It’s nothing genetic, and it has almost nothing to do with nutrition. It’s mainly the result of a psycho-stimulated parenting problem.
Throughout rural China, if you ask parents, when they have their six-month-old baby in their arms, What’s your educational aspiration for your kid? Everyone says, I want him to go to college. But by the time these kids get into middle school, they can barely get through it. Often, they can’t even go to an academic high school. They can’t learn math or science or computers or language skills. And it’s simply because they’re too cognitively delayed.
They’re cognitively delayed essentially because their parents—who love them and want them to go on to college and a good life—are still raising them as if they were raising a farmer. So they make these kids strong, they make them hardy, and they think, When my child gets into school, they’ll start to learn what they need to know there. But kids’ early stimulation is such an important part of their development, and rural parents simply don’t know how to support this for the world they want to send their children into.
The way I look at the problem is, if there are going to be fewer kids, you’d better make sure every one of them is as cognitively well-developed as possible. China faces lots of big problems, but this, really, is the biggest one no one outside the country knows about. Around 40 percent of rural kids are coming out of early childhood not just cognitively delayed but with their cognitive abilities, and their language abilities, and their social and emotional skills set for life.
That may not be a problem from Beijing’s perspective as long as they end up putting these kids to work in an iPhone factory. But those jobs won’t last. And in any event, they won’t help China become the kind of high-skill, high-income society it needs to become if it’s to compensate for its declining population over the next decades. That’ll require creating paths for the emerging population into jobs that depend on knowledge of science and math and computing and so on.
The Chinese are now in a position where they need to offset the dropping quantity of human capital with rising quality—and they’re not really doing it.
Kids’ early stimulation is such an important part of their development, and rural parents simply don’t know how to support this for the world they want to send their children into.
Valentine: What’s stopping them?
Rozelle: The Chinese government knows the rural economy has a human-capital problem. So they have taken some initiatives: Over the last 10 years, they’ve expanded high-school education and invested more in teacher salaries. They’ve also invested in their elementary and middle schools, as well as in preschool for kids aged three to six.
All of which has improved things for children who are capable of continuing to learn. What I worry about is the 40-to-50 percent of kids who have developmental trouble learning. These are kids who’d go into special education in, for example, a U.S. school. They’re kids who need special attention.
But there’s no special education in Chinese schools. It’s one super-competitive, fast-rate system. Every rural school in every province moves at the same pace as the best urban school. And in a system like that, if you’re developmentally delayed, you’re just going to fall further and further and further behind—and eventually, you’re going say, no more; you’re going to drop out.
Valentine: Are there ways to address the problem at the family level, before kids get to preschool?
Rozelle: It’s a tremendous challenge.
For 5,000 years, they’ve raised farmers in rural China. And suddenly, in one generation, you have to raise a college kid. And there’s no curriculum in the schools that teaches you how to do that. If you look at rural moms, most of them have been to middle school. But if you ask one with a very young child, Do you read to your kid? they’ll tend to laugh and say, Of course not. She’s only two years old.
But if you start to engage them on the issue and explain it to them, and then if you get them into a parental-training program on how to support their kid’s development—say, once a week—with different toys and books and so on, you see a lot of traction. After six months, you ask, Mom, do you read to your kid? She says, Yes. How much? Four hours a day.
Time after time, these programs reliably raise the cognitive ability of the child. And Mom becomes very proud of this. She says, My kid is the best smartest kid in the whole village. It’s exactly the sort of thing you’d expect a loving parent to do—if they have the capability to do it.
There’s no special education in Chinese schools. It’s one super-competitive, fast-rate system. Every rural school in every province moves at the same pace as the best urban school. And in a system like that, if you’re developmentally delayed, you’re just going to fall further and further and further behind.
The problem is with the lack of investment in doing this at scale. Over the last five years, the Chinese government has been working on a new zero-to-three policy to support early-childhood development—not through the Ministry of Education but through the Ministry of Health, because it’s aimed at parents, not kids directly. When they delivered the first version of the policy, the document was about an inch thick. There’s a lot in it. But it’s almost entirely focused on the challenges as urban parents face them—how to ensure good daycare, for example, so parents can get back to work and their kids can get taken care of. In the entire policy, there are only a few pages on the challenges as rural parents face them.
The government revised the policy about six months ago, and the third paragraph now says that it’s absolutely essential to develop the human capital of rural kids. But that’s more or less it.
Valentine: So what’s next?
Rozelle: What’s next are difficult choices. We know the budget for developing the human capital of rural kids, like the budget for anything in China, is going to be extracted from GDP growth. And in the near term, a shrinking population is going to slow that, which will slow budgets. But my view is that it’s urgent for China to put as much investment as possible into rural human capital now. Every year they wait, 5 or 6 million kids will come out of early childhood with low cognitive abilities and never, ever catch up.
But with the economy growing slowly and revenues down, the government’s attention is still in other places. They’re spending a lot of money, of course, on defense. They’re spending a lot, still, on the Belt and Road Initiative. They’re spending a lot on getting China to the moon. They’re spending a lot on building a high-speed rail to every county. What I would say is, go to the moon, but go to the moon in 2040, and take half of the space budget and put it into early-childhood development and better rural schools.
It’s a tough sell, though—because those babies you could help now, they won’t enter the workforce until around 2045. If you put a high-speed rail in some remote county in some province, a lot of urban people who’ll use it are going to be happy much sooner.
Meanwhile, in countries like Brazil or Colombia or Mexico or South Africa, they’re already well underway with huge parental-training programs. They understand in these places that they’ve been trapped in middle-income rates for some 60 years. And they know that developing their human capital is the way out. They’re not drawn away from the issue by military expansion or global-infrastructure initiatives or the moon. They’re much more focused, in this sense.
China has done a great job rising from being a poor country to being a middle-income country. But rising from being a middle-income country to being a high-income country, as they have to do now, is a whole different ballgame. And in critical ways, they’re starting way behind. China’s population has the lowest level of education of any upper–middle-income country in the world. That’s where they are. They’re number-one low.