East Asia and Pacific // Analysis

07 march 2013

The Demographically Uncertain Foreign Policy of Today’s China

Alexander Korolev PhD., HSE Professor

Photo:
konin-ss.livejournal.com
China has become an irrevocably ageing nation

Given the dynamic rise of China’s economic and political might it is essential to consider the effect demographic factors might have on the country’s foreign policy. Could the demographics be a potential driving force for China’s expansion or a restraint to Beijing’s foreign policy ambitions? Answering this question may help us better understand the foreign policy motivations of the largest country in the world.

The sizeable demographic weight of China often comes up as an argument in various speculations about the “Chinese threat” [1]. Indeed, all things being equal, a populous nation has significant material advantages in pursuing its foreign policy interests. However, any attempt to carry out a systemic analysis into the impact of demographic factors on the foreign policies of today’s China uncovers certain contradictions that make one rather cautious in drawing conclusions. Obviously, such an impact is far from straightforward, comprising a varied collection of conflicting forces that push the country towards different models of behaviour on the international stage.

It seems proper to define four demographic variables that have a long-term effect on Chinese foreign policy:

  • population growth/decline;
  • the age composition of the population;
  • the society’s gender structure;
  • the size and preferences of the middle class.

Although these factors may be interrelated, when separated they allow for a better understanding of the complexity of the relationship between demographics and foreign policy.

Population Growth and Foreign Policy Goals

The first of the factors in the list reflects the size of the population. A surplus of population is believed to limit access to resources and may thus provoke expansion. However, if one goes deeper than the banality that the Chinese are many, the demographic trends in modern China reveal a quite mixed picture that many Chinese observers find alarming [2].

China has long since entered a phase of very low birth rate. According to the World Bank, while in the 1970s the total fertility rate (TFR [3]) of China was almost 6.0, in the early 1990s the rate crossed the 2.14 mark, which is the natural replacement rate. In the late 1990s the TFR in China reached 1.8, and by 2011 it dropped to 1.5, significantly below that of a number of advanced economies, including the US, UK and France (with 2.1, 1.9 and 1.9, respectively; see Fig. 1). The sixth census of the Chinese population in 2010 showed that the country’s TFR was 1.18, dropping to 0.88 in large cities. This makes it one of the lowest in the world. The record low of 0.14 for the entire TFR history was achieved, according to some research, in the urban district of Jiamusi in the province of Heilongjiang (the People’s Republic of China) in 2000, making this Chinese province an absolute record-holder [4].

Fig. 1. TFR in the US, UK, France and China (1961-2011)

Source: based on World Bank data.

As a result, for more than two decades the birth rate in China has been below the level needed for natural reproduction. This is further aggravated by the fact that this intensive transformation of the reproduction model has taken place in China over an extremely brief period of time, within only two or three decades, whereas it took almost a hundred years for European countries to get there. The Chinese reproduction model today is the same as in advanced economies. However, the per capita GDP in the country persists at a comparatively low level of USD 5,445, or 45 per cent below the world’s average, and less than half of Russia’s.



Photo: scitechdaily.com
China's one child policy was established by
Chinese leader Deng Xiaoping in 1979.

In the long term, this could result in a shift of focus in socioeconomic policies, leading to adjustments of foreign policy. The general birth rate trends are among the key factors underpinning the nation’s capacity to sustain the size of its armed forces. Because of the very low birth rate in China they might have to start questioning the sustainability of the economic model, dependence on other countries and foreign trade. As a result of the one-child policy, which has been pursued for the last thirty years, the birth rate in cities, with access to education, has been below that in rural areas. As a result, China today faces two problems at once: “there are too many people” and “there are too few people”. In other words, there is a huge population but the proportion of the highly educated and qualified workers needed for a radically new economic and technological breakthrough is too low. This is demonstrated, among other things, by the relatively low labour productivity which, according to some sources, is only one tenth of the US figure, and three times lower than in Russia. For the country to be competitive and to push its economy to a radically new level, Chinese authorities would have to invest more in education programmes and improve their technological cooperation with the developed world. This would force China to focus its foreign policy on cooperation, rather than on confrontation.

Age and Foreign Policy Options

Another factor directly affecting Chinese foreign policy is the age structure of the population. Rapid ageing leads to a shortage of labour and to excessive welfare costs. And this, in turn, may restrain international involvement, diverting military budgets and affecting the country’s ability to make significant material commitments in international affairs. Specifically in China, the surplus of older people and the need to offer them adequate welfare guarantees (health care, pensions) could undermine the foreign policy aspect of China emerging as a “responsible world power”.



Photo: economist.com
China's population

The time when China could fully exploit its “demographic dividend” is drawing to an end. The “demographic dividend” is created when the birth rate falls while the proportion of old people remains relatively low. During this time the proportion of the working-age population grows sharply, and the dependency ratio (i.e. the ratio of dependents younger or older than the working age to the working age population) goes down. As a result, the economy is flooded with a large labour resource practically unencumbered by children or old-age parents. In China a constant inflow of such resources created a surplus of the cheap workforce required for large-scale manufacture, and that made the country popular with foreign investors. But this window of demographic opportunity will not be open forever: as the working-age cohorts grow older and leave the market, the rate of reproduction slows down, and the ageing processes set in.

Let us examine the trends affecting the age structure of the Chinese population. The 2010 census shows that the proportion of teenagers under 14 years was 16.6% (6.29% below the 2000 figure), whereas the percentage of population older than 60 reached 13.26% (3% more than in 2000). The percentage of the oldest age group, over 65 years, reached 8.87% in 2010 (1.91% more than in 2000), and in absolute values is comparable to Russia’s population total. According to Professor Chai Chenu, director of the Institute of Sociology and Demographics of the Chinese People’s University, even the prompt cancellation of the one-child policy would not halt the rapid ageing of the population, but could only slow it by 2–3%. China has become an irrevocably ageing nation.

Some estimate that in fifteen years the proportion of 60 plus in China will grow by 100 million and reach 300 million by 2030. By 2050 the country will enter a phase of “deep ageing” [5]. It would require huge allocations to fund social welfare and would force the authorities to increase the tax burden on the shrinking working-age population; and it would profoundly affect foreign trade behaviour and Beijing's ability to honour its international obligations.

One can reasonably assume that a socially struggling China would, in the long term, resort to a high degree of selectivity in its foreign policy. Possible military interventions would be pin-point and brief. China would be actively promoting a multilateral diplomacy to allow it to find common interests on a wide range of urgent but relatively general international issues. As a result, China could have its involvement in international affairs while avoiding unilateral commitments in complex matters.

Gender Relations and Foreign Policy Behaviour

The third demographic factor in China’s foreign policy is the gender structure of its population. One hypothesis states that the surplus male population creates preconditions for internal conflicts, and for aggressive and nationalist foreign policy sentiments [6]. The cause and effect relationship between the gender structure of the population and foreign policy is hardly a direct one. However, history shows a number of examples demonstrating such a relation [7].

Because of the birth rate policies and unique culture of China, it has a colossal surplus of male population. The gender ratio (number of men per 100 women) was 117.94 in 2010; in 1982 this ratio was 107.17, whereas the universal “normal” limit is 103–104. Hence the number of men who cannot have a family in China is about 33 million [8]. The “family-less” form a segment of society especially prone to corruption and violence. The gender imbalance results in social tensions and forces the country’s leadership to respond.

The government has a variety of means to pacify “volatile bachelors”. One of these ways is to send them abroad. We are talking here of both the legitimate export of excessive male manpower, and of various military gambles outside the country. Under certain circumstances, such gambles could kill a few birds with one stone: get rid of the instability factor domestically, promote foreign policy interests and make a contribution to the image of China as a great power.

Middle Class and Foreign Policy Preferences

Finally, the fourth factor of the nation’s foreign policy is the size and preferences of its middle class.

The middle class consists of the more educated, self-sufficient and worldly citizens concerned about their own well-being. They tend to profess fairly liberal views and oppose expensive foreign policy ventures. Also, members of the middle class form the category of more active citizens whose opinions the authorities, be it in democracies or in authoritarian states, have to pay heed to in order to preserve their legitimacy.

Some estimate that the Chinese middle class is composed of residents with annual incomes of USD 10,000 to 60,000. They account for about 25% of the Chinese population, or 300 million. Beijing University research supports the hypothesis about the middle class tending to support liberal views on foreign policy. Over 70% of the Chinese middle class believe that countries’ economic interdependency diminishes the risk of international conflicts. Additionally, the middle class, compared to poorer groups, has shown less support for increases in the defence budget; supported free trade; believed that arms control negotiations were effective; and demonstrated a strong tendency towards a cosmopolitan self-identity. As a consequence, the Chinese middle class, similarly to their peers in other countries, appears to demonstrate proto-liberal foreign policy preferences. This could help render the country’s foreign policy more gentle, especially if China bolsters its democratisation processes.



Photo: AP/Ng Han Guan
Chinese protesters shout slogans outside the
Japanese embassy during a fourth day of protest
in Beijing, China, Friday, Sept. 14, 2012.
Characters on white cards are part of slogan
"Japan get out of Diaoyu islands." Red banner
reads "Life is precious, patriotism is even more
important, Strike at Japan, return our Diaoyu
islands.

* * *

Any assessments of the effect of demographic factors on China’s foreign policy are further complicated by the fact that the significant rate at which the birth rate is dropping and the population is ageing has only become visible fairly recently, due to the inefficient system of registration of newborns, and problems in the collection and maintenance of statistical data. This hinders competent estimates of long-term demographic trends and, as a consequence, any assessment of the scale of the problem.

Two forecasts are possible, with a certain amount of guesswork: short-term and long-term. Of the four scenarios considered, the third one is more likely in a short term perspective, as proved by the recent events around the Diaoyu (Tiaoyutai, or Pinnacle) Islands, which are at the centre of a territorial dispute between China and Japan. The dispute has been fueled by unprecedented outbursts of nationalism in Chinese society and demands to resort to force. Apart from anti-Japanese protests and pogroms, which have forced the closure of Japanese-owned factories, Chinese Navy vessels have been making threatening moves into the territorial waters of Japan. The level of nationalism in its society forces the Chinese leadership to project power and fall back on tougher foreign policy steps.

In the long term perspective, such objective demographic factors as the ageing population and the potential demographic trough will restrain Beijing in its foreign policy ambitions. So far, the Chinese leaders have not been prepared to give up their one-child policy because it furthers the goal of bringing up the per capita GDP. The continuation of the birth control policy will speed up the impact from the population growth/decline and ageing factors. At the same time, the growing per capita incomes will increase the size of the middle class with its liberal preferences in international affairs, which will in turn dictate more measured foreign policy approaches to the country’s leadership.

The government could be afforded some time through various measures mitigating the effect of demographic factors on foreign policy; however, in the long term perspective, they will definitely manifest themselves in quite uncertain forms.

1. The problem of the migration dimension in the “Chinese threat” to Russia was successfully dismissed by V.Ya. Portyakov in a series of articles on Chinese migration to Russia. See Portyakov V.Ya. The Russian vector in global Chinese migration // Issues of the Far East. 2006. No 2. P. 10–21 (in Russian).

2. P’eng Wentsin. Demographic problems of Russia and lessons for China // Future and Development. 2011. № 5. P. 61–65; Yuan Sin. Population Issues in China: before and after // Current Affairs Review. 2012. № 5. P. 53–54 (in Chinese).

3. The total fertility rate is the average number of children born to a woman over her lifetime in a hypothetical generation, provided each of the age groups maintains the existing birth rate irrespective of mortality or changes in the age structure.

4. Terrell H.K.M. Fertility in China in 2000: A County Level Analysis. Unpublished Master of Science Dissertation: Texas A&M University, 2005. P. 52.

5. Wang F. China’s Population Destiny: The Looming Crisis // Current History. 2010. Vol. 109(728). P. 251.

6. For a more comprehensive presentation of this hypothesis, see Hudson V.M., Boer A.D. A Surplus of Men: A Deficit of Peace Security and Sex Ratios in Asia’s Largest States // International Security. 2002. Vol. 26. No 4. P. 5–38; Hudson V.M., Boer A.D. Bare Branches: The Security Implications of Asia’s Surplus Male Population. Cambridge: The MIT Press, 2004.

7. For instance, when in the Middle Ages the Portuguese government (in the person of King John I) faced a serious surplus of male population, accompanied by upsurges of violence, it tried to solve the problem through foreign policy initiatives and territorial expansion. The majority of the bachelors would perish in foreign military campaigns, thus mitigating the domestic situation. See Boone J.L. Noble Family Structure and Expansionist Warfare in the Late Middle Ages // Dyson-Hudson R., Little M.A. (eds.) Rethinking Human Adaptation: Biological and Cultural Models. Boulder, Colo: Westview, 1983. P. 79–86.

8. Yuan Sin. Population Issues in China: before and after // Current Affairs Review. 2012. № 5. P. 53–54 (in Chinese).

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