Fertility and Savings Contractions in China: Long‐Run Global Implications

27 Pages Posted: 16 Nov 2018

See all articles by Jane Golley

Jane Golley

Australian National University (ANU) - Faculty of Economics & Commerce; Australian National University (ANU) - Crawford School of Public Policy

Rod Tyers

Australian National University (ANU) - School of Economics; The University of Western Australia - Department of Economics

Date Written: November 2018

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.

Keywords: China, demography, global effects, saving imbalances, spillovers

Suggested Citation

Golley, Jane and Tyers, Rod, Fertility and Savings Contractions in China: Long‐Run Global Implications (November 2018). The World Economy, Vol. 41, Issue 11, pp. 3194-3220, 2018, Available at SSRN: https://ssrn.com/abstract=3285399 or http://dx.doi.org/10.1111/twec.12602

Jane Golley (Contact Author)

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, Australian Capital Territory 2601
Australia

Australian National University (ANU) - Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Rod Tyers

Australian National University (ANU) - School of Economics ( email )

Arndt Building
Australian National University
Canberra, Australian Capital Territory 0200
Australia
61-6-249-5124 (Fax)

The University of Western Australia - Department of Economics ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia
61 8 6488 5632 (Phone)

HOME PAGE: http://www.business.uwa.edu.au/school/staff-profiles?type=profile&dn=cn%3DRodney%20Tyers%2Cou%3DEcon

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
92
PlumX Metrics