Fertility rates in the developed world are falling rapidly. For population stability, the broadly accepted figure is 2.1 children per woman. The global fertility rate is just above this figure at 2.3 children per woman but among high-income countries, the rate sits at just 1.5. While the United States and European Union countries have found some ways to mitigate falling birth rates, those options are not pursued in East Asia.
The highly developed economies of China, Japan, South Korea, and Taiwan are facing rapid, irreversible population decline. As well as fewer working-age adults, the spike in elderly dependents will present these nations with significant challenges. This article will examine the historical context, root causes, and effects of East Asia’s impending demographic crisis.
Why This Matters
East Asia’s demographic challengers aren’t simply a local or even regional matter. A steep population decline will have profound effects on the global economy. China and Japan are among the largest economies in the world (2nd and 4th overall by GDP) while South Korea and Taiwan are globally competitive despite not boasting huge populations. A shrinking working-age population will struggle to support its dependents and maintain national security.
Historical Background
The global population in 1800 was around 1 billion people but advances in production and medicine lifted constraints on population growth. In a little over 200 years, the world’s population has grown eight-fold.
China’s population growth from 1851-1949 was a little slower than most. The so-called century of humiliations saw a series of catastrophic rebellions, wars, and trade disputes severely diminish China’s growth. After the Chinese Civil War ended in 1949, China’s population exploded. Once lauded as a source of strength for the People’s Republic, the ruling Communist Party introduced a strict one-child policy in 1979. This policy was lifted in 2021.
Japan shifted from an agrarian economy to an industrialized market economy in the span of a single generation in the late 19th century. With the Meiji Restoration came rapid population growth. Even the devastation of World War Two could only slow that growth. Japan’s postwar baby boom followed global trends and another spike occurred in the early 1970s. Japan’s postwar economic miracle dimmed in the 1980s and its population peaked in 2009.
South Korea’s population was around ten million for well over a century. Seoul’s post-WW2 baby boom was delayed by the Korean War (1950-53) but took off in the late 1950s-early 1960s. South Korea went from one of the poorest countries in the world to one of the richest but its embrace of state-backed mega-corporations would have long-term consequences.
The government and officials of the Republic of China (Taiwan) fled the mainland after the loss of the Chinese Civil War in 1949. Around a million people crossed the Taiwan Strait from 1948-9. Taiwan’s population tripled in half a century but the growth has steadily fallen since 1951. Taiwan’s population is projected to peak by the end of the decade before declining.
Current Rates and Projections
China
According to the World Bank Group, China’s 2022 fertility rate was 1.2 births per woman and even lower in its special administrative regions. Hong Kong was the lowest ranked at 0.7 and Macau’s rate of 1.1 was slightly below the mainland. China’s population, 1.4 billion, is already in decline and UN projections suggest this figure could fall to 0.8 to 0.5 billion by 2100. China’s median age is 40.2.
Japan
Japan’s fertility rate is well below replacement levels but still slightly better than China’s. At 1.3 births per woman, Japan’s population (currently 125 million) could fall to around 75 million by the turn of the century. Japan’s main demographic challenge is its aging society. At an average of 49.9, it is the 3rd oldest country in the world.
South Korea
South Korea’s fertility rate is at a crisis point. At 0.7, it’s the world’s lowest and that figure is even worse in Seoul (0.55). Without serious intervention, South Korea’s population could be lower than pre-war levels by 2100. Its median age is a growing concern at 45.5, a whole decade older than its northern neighbor.
Taiwan
Taiwan’s fertility rate is critically low and dropped to just 0.865 in 2023. If those rates continue, Taiwan’s population could dip below 10 million by 2100. Like its neighbors, Taiwan’s aging population (44.6 median age) will only get worse in the coming years.
Causes
Wider Global Trends
Since 1950, global fertility has halved. Nations with high economic development have much lower birth rates than developing countries. Women with access to birth control, education, and employment opportunities tend to start families later in life and have fewer children. Additionally, far more children are living past their first birthday. Historically, birth rates were far higher but extremely high infant mortality rates meant the overall population scarcely budged. Like other developed nations, more than 99% of children born in East Asia will see their 15th birthday. Naturally, more children surviving means fewer births overall.
Population Control Policies
China
As previously mentioned, China attempted to reign in its explosive population growth in 1979-80 with the One Child Policy. Birth rates were already dropping in China but the policy was rigorously enforced to curb population growth. One of the consequences of the policy was to create a gender imbalance by indirectly encouraging families to prefer boys. Today there are about 35 million more men than women in China, a wrinkle that will take decades to correct.
The policy was unevenly enforced, rural families were permitted to have a second child if the first was a girl. In 2016, the policy was lifted to allow couples to have two children, and then three as of 2021.
South Korea
South Korea began family planning policies in 1962 to encourage smaller families. In the aftermath of the Korean War, South Korea was an impoverished agrarian country with an extremely high fertility rate (6 births per woman). South Korea pivoted towards urbanization and an export-focused economy. The government wanted women to have two children for sustainable, replacement-level population growth. With economic incentives, the target was soon realized. Seoul even considered a version of the one-child policy in the 1980s. Little was done to reverse the tide of plummeting birthrates in the 1990s.
Taiwan
Taiwan introduced family planning policies in the 1960s. The small, mountainous island nation feared its rapid population growth after the Chinese Civil War was unsustainable. The government issued the “3-3-3-3-3” guidelines in 1967:
- Wait three years after marriage to begin having children
- Wait three years between pregnancies
- Have no more than three children
- Don’t have children after 33 years old
The government revised the guidelines in 1971 to simply have no more than two children. The fertility dropped sharply in the 1960s and 1970s and dipped below replacement levels in the 1980s. The rate continues to fall despite government attempts to encourage more children.
Housing Affordability
A lack of affordable housing is a major barrier to starting a family and a global problem. In East Asia, the problem of housing affordability is especially acute. Hong Kong is the least affordable city in the world and some have to resort to extreme living situations to get by. The poorest live in tiny, cramped “cage homes” that are clearly unsuitable for beginning a family.
Things aren’t quite so dire on the mainland but the so-called “superstar cities” – Beijing, Shanghai, Shenzhen, and Xiamen have serious affordability problems. Unlike Hong Kong, mainland China has an oversupply of housing units with about 60 million vacant properties.
On average, a South Korean family needs to save for over 16 years in order to purchase a moderately sized home. Seoul’s housing is so expensive that five million people left the city in the last decade for a more affordable area. Taiwan also struggles with affordable housing because of low wages and a lack of available units in its major cities.
Japan’s rural areas are running out of people but robust government housing programs since World War Two mean that its cities are still quite affordable. Japan built over 76 million units between 1948-2020. Among the world’s largest cities, Tokyo is the exception to the rule. The wide availability of housing and a declining population keeps rents down to reasonable levels.
Work Culture
Another major barrier to starting a family in East Asia is the culture of working excessively long hours. China’s official workweek is 44 hours, however, several companies practice a brutal “996” schedule: 9 am-9 pm, six days a week. Some disaffected young Chinese people resisted by “lying flat.”
Japan’s culture of overwork is so deeply ingrained that there’s a term for it. Karoshi (“death from overwork”) is not a new phenomenon, the term was first coined in the 1970s. Some cases were from heart attacks and strokes, but many were from suicide. Japan introduced legislation to cap the amount of overtime an employee can work.
South Koreans work an average of 1,901 hours annually, the fifth-highest in an OECD study. That number could have risen even higher if a government proposal of a 69-hour workweek hadn’t met such fierce opposition. Compounding Korea’s culture of long hours are cultural taboos that keep workers away from their families. In many workplaces, it’s not acceptable to leave before the boss, and after-work drinks are often mandatory.
Taiwan doesn’t tend to appear in international studies due to its complex relationship with China. A report from the Ministry of Labor comparing the working hours of 39 economies around the world placed Taiwan sixth. At 2,008 hours, the only Asian economy in the report with more hours was Singapore.
Effects
Dependency Ratio
The balance of workers to dependents is a key consideration for a nation’s economy. Too many young people (0-14) are just as great a burden as too many elderly (65+). This is why East Asian countries attempted to curb population growth in the 1960s and 1970s. However, this overcorrection has pushed the dependency ratio in the other direction.
Japan’s dependency ratio (69.94%) is significantly higher than the rest and its aging population is having a deflationary effect on its economy. A smaller population means a lower tax base and makes it more difficult to sustain social services and infrastructure. Of course, a glut of elderly dependents will only be temporary. If the short-term strain on the economy can be endured it is a problem that takes care of itself.
National Security
Population decline will impede the military effectiveness of the nations profiled in this article. China’s ambitions toward Taiwan are no secret and its military is undergoing a modernization program to make that goal feasible. China will probably have the means to invade Taiwan by 2027 but the difficulty of the operation means Beijing will only have a few years to carry it out. By some estimates, the window of opportunity could close by 2030. Its neighbor and occasional rival India is still growing and those border tensions could yet ignite if the People’s Liberation Army is understrength.
Japan’s self-defense force boasts one of the world’s most powerful navies but it faces serious problems finding enough recruits to man its many ships. Many vessels are already undermanned and further population decline will only exacerbate those problems. South Korea is technically still at war with its neighbor. North Korea’s population is also declining but much slower than South Korea. Pyongyang’s large but outdated military is not a great threat to Seoul but that could change if South Korea’s population declines enough. Taiwan’s introduced a one-year conscription period in early 2024. If its population continues to decline, more drastic measures could be needed to fill the ranks of its military.
Solutions
Government incentives to reverse population decline have not worked. Private companies in South Korea have gone a few steps further to encourage workers to have more children but these policies are not going to be enough to reverse the entire country’s fertility rate.
Japan is betting big on automation and robotics to alleviate its impending labor shortage. It would hardly be the first time the country has profoundly reshaped its society.
Migration is another way to plug a labor shortage and one used by several countries around the world. The United States has the most foreign-born residents at 50.6 million overall (about 15% of the population) but Arab countries like Kuwait (72.8%), Qatar (77.3%), and the United Arab Emirates (88.1%) have much higher rates of immigrants. However, East Asia is far less likely to embrace mass immigration.
Finally, there’s an argument to make that population decline isn’t actually a problem to fix. The explosion in the global population came with severe ecological effects: more humans inevitably means less wildlife, less biodiversity, and rising greenhouse emissions. Infinite growth on a finite planet is not sustainable in the long run. Rather than expending vast resources to combat an irreversible downward spiral in fertility rates, East Asia could instead embrace population decline.
Conclusion
The causes of East Asia’s steep drop in birth rates are multifaceted and a result of long and short-term factors. In part, it’s just a natural phenomenon of a highly developed nation as effective family planning tends to lead to smaller families. If anything, the measures to control population growth in the 1960s and 1970s worked a little too well and are not easily reversed. Without a major overhaul of housing, immigration, and labor policies, there’s no reason to expect these trends to change. Of course, there’s a case to be made that population decline is not actually a problem but an opportunity to shift towards a fairer and more sustainable global economy.
China, Japan, South Korea, and Taiwan stand at something of a crossroads today, they must each decide if population decline is a problem to solve or an opportunity to embrace. There is no simple or one-size-fits-all solution to what is ultimately a worldwide phenomenon. The decisions made by policymakers today and in the next few years will shape the region and the wider global economy.
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