When population is growing the economy of a country will also tend to grow. If a population becomes older and is not growing the consumer demand of that country will tend to stagnate.

A growing population helps an economy by creating an increase in demand as world economies respond to demand dynamics which have a heavy population and youth influence.

There is also a tendency for happiness index to increase with increased economic success. This follows a curves of decreasing returns on the increase of economic abundance.

It is difficult for people to maintain an optimized sense of well being if they are experience a lack of adequate nutrition. If economies can maintain a sufficient level of security and have a sense of purpose and future the society can prosper in many senses.

Freedom can be a useful element of giving society the ability to grow and prosper. Centrally controlled dictatorial societies can have real issues in relation to economic growth and their happiness index. 

In this article, we are going to take China as a case study on how population growth can affect economic growth.

• What Effect did China’s Rapid Growth have on the Economy?
• What are Some Effects of China’s Huge Population?
• 5 Possible Solutions to Overpopulation
• Is Population Growth Good or Bad for Economic Growth?
• Why is China’s Economy so Good?
• What are the Effects of China’s One Child Policy?
• Why is China so Overpopulated?
• What is the Main Cause of Population Growth?

What Effect did China’s Rapid Growth have on the Economy?

Since opening up to foreign trade and investment and implementing free-market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5% through 2018, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.”

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Such growth has enabled China, on average, to double its GDP every eight years and helped raise an estimated 800 million people out of poverty. China has become the world’s largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves.

This in turn has made China a major commercial partner of the United States. China is the largest U.S. merchandise trading partner, biggest source of imports, and third-largest U.S. export market.

China is also the largest foreign holder of U.S. Treasury securities, which help fund the federal debt and keep U.S. interest rates low.

As China’s economy has matured, its real GDP growth has slowed significantly, from 14.2% in 2007 to 6.6% in 2018, and that growth is projected by the International Monetary Fund (IMF) to fall to 5.5% by 2024.

The Chinese government has embraced slower economic growth, referring to it as the “new normal” and acknowledging the need for China to embrace a new growth model that relies less on fixed investment and exporting, and more on private consumption, services, and innovation to drive economic growth.

Such reforms are needed in order for China to avoid hitting the “middle-income trap,” when countries achieve a certain economic level but begin to experience sharply diminishing economic growth rates because they are unable to adopt new sources of economic growth, such as innovation.

The Chinese government has made innovation a top priority in its economic planning through a number of high-profile initiatives, such as “Made in China 2025,” a plan announced in 2015 to upgrade and modernize China’s manufacturing in 10 key sectors through extensive government assistance in order to make China a major global player in these sectors.

However, such measures have increasingly raised concerns that China intends to use industrial policies to decrease the country’s reliance on foreign technology (including by locking out foreign firms in China) and eventually dominate global markets.

In 2017, the Trump Administration launched a Section 301 investigation of China’s innovation and intellectual property policies deemed harmful to U.S. economic interests.

It subsequently raised tariffs by 25% on $250 billion worth of imports from China, while China increased tariffs (ranging from 5% to 25%) on $110 billion worth of imports from the United States.

Such measures have sharply decreased bilateral trade in 2019. On May 10, 2019, President Trump announced he was considering raising tariffs on nearly all remaining products from China.

A protracted and escalating trade conflict between the United States and China could have negative consequences for the Chinese economy.

China’s growing global economic influence and the economic and trade policies it maintains have significant implications for the United States and hence are of major interest to Congress.

While China is a large and growing market for U.S. firms, its incomplete transition to a free-market economy has resulted in economic policies deemed harmful to U.S. economic interests, such as industrial policies and theft of U.S. intellectual property. 

What are Some Effects of China’s Huge Population?

China has the highest population in the world, encompassing 1.2 billion or twenty one percent of the world’s population. China faces serious social and economic problems associated with overpopulation in the years to come.

Overly populated regions lead to degradation of land and resources, pollution, and detrimental living conditions. The Chinese government has tried to find a solution to the problem of increasing population with moderate success.

China’s population control policy

The Chinese government has used several methods to control population growth. In 1979, China started the “one child per family policy”. This policy stated that citizens must obtain a birth certificate before the birth of their children.

The citizens would be offered special benefits if they agreed to have only one child. Citizens who did have more than one child would either be taxed an amount up to fifty percent of their income, or punished by loss of employment or other benefits.

Furthermore, unplanned pregnancies or pregnancies without the proper authorization would need to be terminated. In 1980, the birth-quota system was established to monitor population growth.

Under this system, the government set target goals for each region. Local officials were mainly held responsible for making sure that population growth totals did not exceed target goals. If target goals were not met, the local officials were punished by law or by loss of privileges.

Other population control methods

Other methods that have been used by the Chinese government to restrict rising population totals include birth control programs and economic changes. In the early ’80’s, sterilization target goals were set and made mandatory for people who had two children.

At its peak in 1983, tubal ligations, vasectomies, and abortions amounted to thirty-five percent of the total birth control methods. In addition, the economy changed from primarily one of agriculture to industry.

The government used this to its advantage; spreading the view that economic growth would hinder population growth.

Problems associated with population policies

There have been many problems associated with the policies and programs established by Chinese officials.

First of all, these programs have been difficult to implement and have had little success. Local officials in charge of growth totals, have falsified reports in order to avoid punishment.

Consequently, this has led to underreporting of the number of births by as much as twenty-seven percent in 1992. Moreover, compliance with the birth-quota system has been low.

Of the 14,808 infants born between 1980-1988, only about half have been with a legal birth permit. Of those born with a permit, eighty-eight percent were first children born into families. Furthermore, out of the second children born, only eleven percent were authorized.

Lastly, people of rural communities, who depend on having larger families to help with the farms, have succeeded in finding ways around the birth-quota system.

Social and political consequences

The Chinese government has also had to deal with political and social upheaval as a result of its strict policies. The United States, as well as many other countries, have publicly expressed their disapproval with Chinese leaders for their sterilization policies.

In addition, the Chinese citizens have retaliated with acts of violence related to the one child policy.

Finally, the cultural preference for sons has led to a large number of incidences of female infanticide. As a result, the Chinese government has had to relax policies to include the “daughter-only-household” policy, which allows rural couples having a daughter first to be allowed to have a second child.

Social and economic benefits

Over the last fifty years, China has raised the standards of living by keeping growth rates down. Access to natural resources have increased dramatically since 1980.

According to the State Family Planning Commission, coverage in tap water has increased from eighty-four percent to ninety-four percent in the last fifteen years.

Furthermore, coverage of natural gas has risen from sixteen percent to seventy-three percent.

In addition, medical coverage has been extended to include birth insurance and workers compensation for mothers who follow China’s birth policies (SFPC). In 1998, nineteen percent of China’s population used this policy.

Other benefits include increases in average life expectancy from thirty five years in 1949 to seventy years in 1996, and decreases in infant mortality rates from two hundred per one thousand to thirty three per one thousand (SFPC).

Future outcomes

Serious reforms are needed to ensure that China’s population will not continue to grow. Better policies, more education, and urbanization could help China to reach population target goals.

Since 1980, China has realized the importance of collaboration among agencies, and it has established the Population and Information Research Center (SFPC).

This agency, along with others, is in charge of gathering information about population totals and helping the government to implement policies (SFPC).

Projected growth of China’s population is estimated to be around 1.5 billion by the year 2025. These figures will continue to rise, and the social and economic burdens will continue to plague everyone living in China.

5 Possible Solutions to Overpopulation

1. Empower women

Studies show that women with access to reproductive health services find it easier to break out of poverty, while those who work are more likely to use birth control.

The United Nations Population Fund aims to tackle both issues at once, running microcredit projects to turn young women into advocates for reproductive health.

2. Promote family planning

Simply educating men and women about contraception can have a big impact. When Iran introduced a national family planning programme in 1989, its fertility rate fell from 5.6 births per woman to 2.6 in a decade.

A similar effort in Rwanda saw a threefold increase in contraception usage in just five years.

3. Make education entertaining

The US-based Population Media Center gets creative to reach women. Its radio soap operas, which feature culturally specific stories about reproductive issues, have been heard by as many as 500 million people in 50 countries.

In Ethiopia, 63 per cent of women seeking reproductive health services reported tuning in.

4. Government incentives

Those at UK charity Population Matters believe there should be a senior government official responsible for addressing population-related issues.

They urge governments to promote “responsible parenthood” and say subsidies should be limited to the first two children unless the family is living in poverty.

5. One-child legislation

During China’s high controversial one-child policy, fertility fell from six births per woman in the 1960s to 1.5 in 2014. However, Amnesty International reports that the policy led to coerced or forced abortions and sterilisations.

It also disrupted traditional support structures for the elderly and led to a gender imbalance

Is Population Growth Good or Bad for Economic Growth?

Economic growth can mean a lot of different things. It can just refer to any growth in the value of an economy as a whole.

But more generally, economic development is the continued, active efforts of the public and private sectors of a country that promote the standard of living and economic health of the country.

The economic health of a country relates to the economic growth of the country and the general freedom and competitiveness of the market in the country.

Generally, as a country becomes more economically developed, the well-being of its citizens improves in a lot of ways: their health, education, security, freedom, and self-sufficiency.

The effect of population growth can be positive or negative depending on the circumstances.

A large population has the potential to be great for economic development: after all, the more people you have, the more work is done, and the more work is done, the more value (or, in other words, money) is created.

So, surely this can be nothing but good. There’s a reason that farmers often have a lot of kids – more kids means more workers.

But, unfortunately, it isn’t that simple. In a country with abundant resources and money – a rich country – perhaps more people is a good thing. But that isn’t always the case in countries with limited resources.

Limited resources and a larger population puts pressures on the resources that do exist. More people means more mouths to feed, more health care and education services to provide, and so forth. So, population can be a mixed bag.

Why is China’s Economy so Good?

Labour supply 

There is a plentiful supply of workers in China with a steady stream of rural-urban migrants in search of work. This is due to the mechanisation of agriculture leading to unemployment and under-employment in rural areas and concurrent growth in industrial work in urban areas.

It is estimated that 500,000 million people will leave the Chinese countryside in search of work over the next two decades. 

Voluntary migration of the rural population has been accompanied by aggressive re-planning schemes in which rural villages are demolished and new manufacturing settlements built at rapid pace for former agricultural families to move in to. 

Wages and unemployment 

The unemployment rate has fallen in recent years to just over 4%, but high rates in the past drove down wages. If workers demand higher wages, there are many more who will take the jobs available.

Wages in other East Asian countries earn up to 10 times more than Chinese workers. This has increased profit margins and attracted inward FDI (Foreign Direct Investment) as American, European and Japanese companies open factories under licence in China. 

Female participation in the workforce 

China’s workforce is characterised by a higher than average female participation in manufacturing industry. Western cultural analyses of gender divisions in the workforce have little relevance in Chinese economic growth. 

This, along with the One-Child Policy which has meant women were involved in child-raising for a much shorter period than in many other countries, has made a much larger workforce available. 

Political system 

The non-democratic and authoritarian political regime in China has meant that it has been possible to embrace western-style free market economics while maintaining control over the political system.

In many ways, the planned economy of China (where the state controls economic activity rather than private business) has accelerated economic growth because the government has controlled all decision-making. 

Since Mao in 1953, the government has followed a series of Five Year Plans (or Guidelines, as they are now called, to reflect China’s transition towards a ‘socialist market economy’) which have enabled the government to enact any reforms it feels is necessary.

Policies include spending 2.2% of GDP on R&D (Research and Development) and moving coastal regions from being ‘the world’s factory’ to being hubs of R&D, top-end specialist manufacturing and services. 

Strong leadership 

Chinese politicians are said to feel a greater responsibility to the nation than to themselves. Strong leadership from the head of state has been a major factor contributing to economic success. 

Free market economics 

China first began moving away from a centrally planned economy towards a market-oriented system in 1978. Deng Xiaoping was Mao’s successor and he sought to bring an end to China’s relative economic isolation.  

Export-led growth 

This is the strategy which China initially pursued. The strategy is beginning to become phased out in favour of Import Substitution Industrialisation by which consumer products imported for China’s growing middle-class are increasingly being made in China, such as cars, domestic white goods and house- and office-furniture. 

Special Economic Zones and FDI 

Foreign investment was encouraged in the initial phase of economic growth. They tended to locate in one of 6 SEZs (Special Economic Zones) or 14 Open Cities in which a relaxation of regulation and government control created a more attractive business environment. 

These are designated zones where TNCs (Trans National Corporations) are offered incentives such as reduced tax rates to set up manufacturing operations.

An example is a Taiwanese TNC, EUPA, which manufactures coffee machines in Xiamen (an Open City) and employs 25,000 workers. 

Private enterprise 

For many years all manufacturing in China was state owned and operated. This has gradually been relaxed as the economy has been restructured and now up to 50% of businesses are privately owned. 

Energy supply 

Since the 1990s China has been developing its energy base, with new hydroelectric and nuclear power plants. 

China is also embarking upon a massive coal-fired power-station opening programme based on its own substantial coal reserves plus imports from Australia and Indonesia.

However, serious urban air pollution together with a commitment to limiting carbon emissions after 2030 is leading to a less rigorous expansion of this electricity source. 

Investment in infrastructure 

The government has built many new roads, improved the rail system and made China’s major rivers navigable all year round. China has five of the ten largest container ports in the world (including Shanghai and Shenzhen). Urbanisation has also been encouraged. with a robust urban-construction programme. 

Economic diversification  

China has recently started to diversify into Research and Development, specialist manufacturing and hi-tech industry. It is investing labour and capital in innovation so that it can sustain its economic growth and reduce the risk involved in having a narrow economic base. 

Education 

Literacy levels of China have risen dramatically over the past 20 years and now stand at 95%. This has underpinned the economic development of the country.

As a result, China has both large numbers of unskilled workers and a growing number of highly skilled workers. For instance, China trains 600,000 new engineers every year. 

‘Going global’ 

China has started to globalise economically by buying up foreign companies in North America and Europe particularly. In fact, in 2010 China invested $56bn in in outward Foreign Direct Investment.

With inward FDI averaging some $60bn per year, China had, by 2015, converted from a net recipient to a net investor in FDI, a marker of its economic maturity in many respects. 

Location 

China’s geographical location has geopolitical significance because of its proximity to consumer markets and trading partners. South Korea, Taiwan, Japan and Hong Kong are on major trade routes.

It is no coincidence that the first SEZs were concentrated on the east coast facing Taiwan and the Pacific, particularly around Hong Kong. 

Raw materials 

China has a great wealth of natural resources, having vast reserves of coal, oil and natural gas. These are being used to fuel the industrial development of the country. 

However, so large is the country’s requirement for raw materials to feed its manufacturing industries, that it is a major importer of oil, gas, coal, iron-ore, copper and other key commodities in world trade. 

Confucian values 

State and society are emphasized above the individual. There is a long history of submitting personal ambition to that of the community and state through Confucianism.

The degree of control and authoritarian structures are more accepted in China than in most western cultures with their emphasis on individualism. 

Population growth 

Rapid population growth in China, despite the One Child Policy, has resulted in very large numbers in the economically active population, leading to rapid urbanisation. This has fuelled further industrialisation, allowing for further population growth. 

What are the Effects of China’s One Child Policy?

The one-child policy was a program that was implemented nationwide by the Chinese government in 1980 in order to limit most Chinese families to one child each.

The policy was enacted to address the growth rate of China’s population, which the government viewed as being too high. In late 2015 the government announced that the one-child limit per family would end in 2016. Here are some of the major consequences of the policy.

• The fertility rate decreased after 1980.
• The birth rate decreased after 1980.
• The overall rate of natural increase (the difference between the birth rate and the death rate) declined.
• The Chinese government estimated that some 400 million births were prevented by the policy, although some analysts dispute this finding.
• As sons were generally preferred over daughters, the overall sex ratio in China became skewed toward males. In 2016 there were 33.59 million more men than women.
• Because of the preference for sons, there was a rise in the number of abortions of female fetuses.
• The number of female babies killed, abandoned, or placed in orphanages increased as a result of the policy.
• Incentives were offered to families complying with the policy, including financial perks and greater employment options.
• Millions of Chinese parents had to endure strict enforcement methods of the policy, including forced sterilization and forced abortions.
• In families that already had one child, the births of additional children—in violation of the one-child policy—were often undocumented, leading to many problems later on for those children as they struggled to receive an education or find work.
• Even after the one-child policy was rescinded, China’s birth and fertility rates remained low, leaving the country with a population that was aging too rapidly as well as a shrinking workforce.

Why is China so Overpopulated?

Overpopulation in a country is the result of the number of people in an area being much higher than the country’s available resources. 

Overpopulation in China began after World War II in 1949, when Chinese families were encouraged to have as many children as possible in hopes of bringing more money to the country, building a better army, and producing more food.

What is the Main Cause of Population Growth?

Of all of the environmental challenges facing the planet today overpopulation is one that sometimes slips under the radar. Issues like pollution, climate change and water shortages all seem to take precedence, but overpopulation is one of the main contributors to many other environmental issues.

Overpopulation will place great demands on resources and land, leading to widespread environmental issues in addition to impacting global economies and standards of living.

The issue is compounded by the difficulty in providing solutions for this problem and misunderstanding of the causes and effects of overpopulation.

That been said, below are some of the factors that contribute to population growth.

Poverty

Poverty is believed to be the leading cause of overpopulation. A lack of educational resources, coupled with high death rates leading to higher birth rates, result in impoverished areas seeing large booms in population.

The effect is so extensive that the UN has predicted that the forty-eight poorest countries in the world are also likely to be the biggest contributors to population growth.

Their estimates state that the combined population of these countries is likely to balloon to 1.7 billion in 2050, from 850 million in 2010.

Poor Contraceptive Use

Though the availability of contraceptives is widespread in developed countries, poor planning on both partners’ parts can lead to unexpected pregnancies.

Statistics have shown that in Great Britain 76% of women aged between 16 and 49 used at least one form of contraceptive, leaving a quarter open to unexpected pregnancies.

This issue is exacerbated in underdeveloped areas. A study by the World Health Organization (WHO) shows that this usage figure drops to 43% in countries that are blighted by issues like poverty, which leads to higher birth rates.

Child Labor

As distressing as it may be to hear, child labor is still used extensively in many parts of the world. UNICEF estimates that approximately 150 million children are currently working, primarily in countries that have few child labor laws.

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This can result in children being seen as a source of income by impoverished families. Furthermore, children who begin work too young also lose the educational opportunities they should be granted, particularly when it comes to birth control.

Reduced Mortality Rates

Improvement in medical technology has led to lower mortality rates for many serious diseases. Particularly dangerous viruses and ailments such as polio, smallpox and measles have been practically eradicated by such advances.

While this is positive news in many ways, it also means that people are living longer than ever before. This “delay” in the cycle of life and death has led to birth rates outstripping death rates by over two to one in modern times.

Fertility Treatment

Though it only plays a minor role in comparison to the other causes of overpopulation, improved fertility treatments have made it possible for more people to have children.

The number of women using various fertility treatments has been on the rise since their inception. Now most have the option of conceiving children, even if they may not have been able to do so without such treatments.

Immigration

Unchecked immigration into countries may lead to overpopulation to the point where those countries no longer have the required resources for their population.

This is particularly problematic in countries where immigration numbers far exceed emigration numbers.

In some cases, immigrants may be attempting to escape overpopulation in their own countries, only to contribute to the same issues in the countries they move to. However, data also exists to show the immigration can bolster economies, with the effect in the UK being particularly pronounced.