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Fertility And Savings Contractions In China: Long-Run Global Implications

Author

Listed:
  • Jane Golley

    (Australian Centre for China in the World, Australian National University)

  • Rod Tyers

    (Business School, University of Western Australia; Research School of Economics, Australian National University)

  • Yixiao Zhou

    (School of Economics and Finance, Business School, Curtin University)

Abstract

Following three decades of rapid but unbalanced economic growth, China’s reform agendas are set to rebalance the economy toward 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, the results from which show that 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, 2016. "Fertility And Savings Contractions In China: Long-Run Global Implications," Economics Discussion / Working Papers 16-24, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:16-24
    Note: MD5 = 29513887575be10593d9163a3f800313
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    3. Rod Tyers & Yixiao Zhou, 2018. "Lost Inflation?," Economics Discussion / Working Papers 18-01, The University of Western Australia, Department of Economics.
    4. 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.

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    More about this item

    Keywords

    China; demography; saving imbalances; spill-overs; global effects;
    All these keywords.

    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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