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Fertility and savings contractions in China: Long‐run global implications

Author

Listed:
  • Jane Golley
  • Rod Tyers
  • Yixiao Zhou

Abstract

Following three decades of rapid but unbalanced economic growth, China's reform agendas are set to rebalance the economy towards consumption while maintaining strong GDP growth. Headwinds include a demographic contraction that will bring negative labour force growth and rapid ageing. Rising aged dependency combined with lower saving rates will rebalance the economy, but they will reduce both GDP growth and real per capita income. While an effective two‐child policy could sustain growth and eventually mitigate the aged dependency problem, it would set real per capita income on a still lower path. These conundrums are examined using a global economic and demographic model, which shows how the continuing demographic and saving contractions in China would alter the trajectories of both the Chinese and global economies.

Suggested Citation

  • Jane Golley & Rod Tyers & Yixiao Zhou, 2018. "Fertility and savings contractions in China: Long‐run global implications," The World Economy, Wiley Blackwell, vol. 41(11), pages 3194-3220, November.
    • Handle: RePEc:bla:worlde:v:41:y:2018:i:11:p:3194-3220
    DOI: 10.1111/twec.12602
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    Cited by:

    1. Prayudhi Azwar & Rod Tyers, 2016. "Post-GFC External Shocks and Indonesian Economic Performance," CAMA Working Papers 2016-58, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Rod Tyers & Yixiao Zhou, 2019. "Financial Integration and the Global Effects of China's Growth Surge," Economics Discussion / Working Papers 19-01, The University of Western Australia, Department of Economics.
    3. Rod Tyers & Yixiao Zhou, 2018. "Lost Inflation?," Economics Discussion / Working Papers 18-01, The University of Western Australia, Department of Economics.
    4. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    5. Yixiao ZHOU & Rod TYERS, 2019. "Implications of Automation for Global Migration," Economics Discussion / Working Papers 19-19, The University of Western Australia, Department of Economics.
    6. Chang, Liang & Liang, Xiaojun & Tan, Na & Liang, Shuting, 2024. "From restriction to relaxation: The impact of fertility policy on household savings across countries," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 2102-2129.
    7. Jiamin Lim & Arianna Cowling, 2016. "China’s Demographic Outlook," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 35-42, June.
    8. Ke Li & Lei Gao & Zhaoxia Guo & Yucheng Dong & Enayat A. Moallemi & Gang Kou & Meiqian Chen & Wenhao Lin & Qi Liu & Michael Obersteiner & Matteo Pedercini & Brett A. Bryan, 2024. "Safeguarding China’s long-term sustainability against systemic disruptors," Nature Communications, Nature, vol. 15(1), pages 1-10, December.
    9. Rod Tyers & Yixiao Zhou, 2022. "A Bamboo Curtain: The Grim Australian Consequences of China Conflict," Economics Discussion / Working Papers 22-20, The University of Western Australia, Department of Economics.

    More about this item

    JEL classification:

    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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