The contrast is startling. In the mid-1960s, China’s mothers still gave birth to an average of six children. Today, they have only 1.3 children, as the analysis of the current census shows. As the number of young people shrinks, so does consumption in the long term – a trend that company executives should keep on their radar. Meanwhile, experts have doubts about the figures: There may be even fewer children born than reported. Nevertheless, the now available data is the most valuable information we have about China’s population, explains Felix Lee. A census like this only takes place every ten years.
China and Australia are still in conflict. Beijing wants to reduce its dependence on ore supplies from Down Under, to put the rebellious partner under pressure more effectively. But even high investments in Guinea will not bring the desired independence, as Frank Sieren reports. Australia has particularly rich deposits of high-quality iron ore.
While demand for EVs is booming, Tesla has decided to forgo the originally planned expansion of its factory in Shanghai for the time being. The company wanted to supply the US market from there. But the trade dispute makes that seem less advisable.
Until now, it was an assumption. Now, it is official: China’s population is growing more slowly than it has in decades. And even if, contrary to reports in some Western media, the population did not shrink last year, this situation will occur in the next few years. No one doubts that anymore.
The decennial census released Tuesday showed the population of the world’s most populous country to date has risen 5.4 percent in the past decade to 1.41 billion. The statistics office has not released annual figures. That is the slowest increase since the 1950s.
The reason for this is the further decline in the birth rate. Statistically, a woman has 1.3 children. The rate is thus on a par with Japan, Italy and Germany, the societies worldwide that are currently aging the fastest. The problem is that while these countries have reached a level of prosperity that will ensure sufficiently high pensions, at least in the next few years, the People’s Republic is aging before private households have accumulated enough assets to be provided for in old age.
And what’s more: “Population growth will continue to slow down in the future,” confirmed Ning Jizhe, Head of the National Bureau of Statistics, at the presentation of the results. However, Ning would not name when China’s population is expected to peak. It is still “uncertain,” he said. At the same time, however, he revealed that only 12 million births were registered in 2020, compared with 15 million in 2019. The number of deaths, on the other hand, is rising slowly but steadily. It was still at 7.26 million in 2019 but at 7.4 million a year later. Immigration plays no significant role in these figures because it happens rarely.
What the distortion of the population pyramid into a mushroom shape means for companies on the Chinese market is comparatively easy to see and has been known for some time. For quite a while, the group of middle-aged consumers whose children are already out of the house (“Working Age Empty Nesters“) will grow the fastest. They like to treat themselves – from small luxuries to big trips. Urbanization also continues, creating new consumers moving into the middle class. These families often buy their first better car and other consumer goods. So the market for high-end goods will continue to grow for the foreseeable future. But not indefinitely.
At the same time, the current working generation continues to save a lot of money. They know that society is facing a pension problem. But they only know one safe investment: their own home or other real estates. The bubble in the housing market will thus probably continue to expand. Meanwhile, the potentially lucrative market for retirement annuities will probably remain closed – unless the investment agreement between the EU and China (CAI) works some wonders here.
So far, the United Nations has assumed that the number of people living in the People’s Republic will peak in 2030. But if the trend of recent years continues, this point will probably be reached by the middle of this decade. And China will lose its status as the world’s most populous nation by then. According to calculations, India will overtake the People’s Republic in about four years. According to UN figures, the country currently has around 1.38 billion inhabitants. However, the population in India is growing much faster.
For decades, the Chinese leadership’s doctrine was to curb population growth. Since the early 1980s, it has propagated the one-child policy. For almost 35 years, each married couple in the cities was allowed to give birth to only one child. In the countryside, a maximum of two children were allowed. Those who did not comply faced hefty penalties. Population growth actually declined.
But this development came at a high price – which the country will soon have to deal with. The abrupt introduction of such a rigid population policy will lead to a high proportion of the population retiring in one fell swoop, while the proportion of people of working age will shrink. In 2016, China abolished its decades-old one-child policy.
But this step was taken too late; the shrinkage in the coming decades remains irreversible and is already in full swing. According to official figures, 894 million inhabitants were aged between 15 and 59 last year, five percent less than in 2011, when the number peaked at 925 million. By contrast, the proportion of those aged 60 or over rose by 5.4 percentage points to 18.7 percent, or 264 million.
The late turnaround may be the reason for suspicions that the data may be skewed and that China’s population is growing even more slowly or perhaps already shrinking. But while collecting data on such a large population is not easy, the census data is the best information we have on the Chinese population.
When exactly the tipping point will be reached is not so important. Experts have warned of a “demographic time bomb” for years. The proportion of people of working age in the total population will fall from three quarters in 2011 to just over half in 2050. According to economists, that will hurt productivity. “Our projections, based on pre-census figures, already indicated that the working-age population would shrink by 0.5 percent a year until 2030, with similar effects on gross domestic product,” write analysts at Capital Economics, for example. High economic growth rates can then no longer be expected.
This development could also have repercussions on geopolitical competition. While China’s population is shrinking, the US will grow by 15 percent by 2050, according to the UN. Slower growth in the People’s Republic would make it more difficult to catch up with the United States economically, the analysts at Capital Economics write. And China’s central bank also concludes: “Education and technological progress cannot compensate for population decline.”
COP 15, the United Nations Conference on Biodiversity, was due to take place on 17 May. Now it has been postponed until October. The digital venue will be Kunming in southern China. A success to protect the remaining biodiversity would be a “Global Deal for Nature”. In other words, everyone must pull together. The same applies to curbing climate change, as all parties reiterated at US President Joe Biden’s climate summit. At the national level, China seems to be playing its part: It has had a climate change law since 2007, and in 2020 President Xi Jinping announced that China would be carbon neutral by 2060.
But China’s coal industry is booming and the climate and biodiversity goals are receding into the distance. Producing and burning coal harms the environment and thus endangers biodiversity. Moreover, coal burning is still the largest source of carbon emission, responsible for about one-third of the temperature rise to date. However, coal accounts for about 60 percent of China’s electricity consumption to date, and at over 1000 gigawatts, China operates half of the world’s coal-fired power plants. In 2020, 38.4 gigawatts of new coal capacity also came online. A further 206 GW are under construction and in planning, representing 41 percent of global coal-fired power plants under development.
What is wrong is the popular belief that the West cannot change anything in China anyway and has nothing to do with the direction of China’s energy production. That China is the EU’s largest trading partner and, therefore, many of our goods are produced with Chinese coal-fired power is reasonably well known. Less obvious are the global financial flows: Even though Chinese coal companies are mainly funded domestically, foreign financiers also support China’s coal industry in the Middle Kingdom. According to Urgewald research, 467 international financial institutions have financed Chinese companies listed on the Global Coal Exit List (GCEL). This is according to Urgewald’s February 2021 financial research, which investigated the banks and investors behind the companies on the Global Coal Exit List (GCEL). Everyone is pulling in the same direction here, but unfortunately, in the wrong direction.
A tenth of the money that flowed into China’s coal sector in the last two years has come from abroad. 48 international banks have provided $21.7 billion for China’s coal industry. The lion’s share of this sum was provided in the form of underwriting, i.e., by issuing shares and bonds.
By far the largest financiers from abroad come from the UK and the US. British banks such as HSBC and Standard Chartered have lent $5 billion and US banks such as JPMorgan Chase and Citigroup are only just behind with $4.9 billion. Banks from Japan, Switzerland and France have also sunk over $2 billion each into the Chinese coal sector. Among the biggest recipients of foreign money is China Huaneng, with $1.2 billion. The company has installed more than 100 gigawatts of coal-fired capacity and plans to add another 32 gigawatts. 439 investors have invested $19.6 billion worth of stocks and bonds in Chinese GCEL companies as of January 2021. This exceeds the investments of country-owned financial institutions by $2 billion.
The ranking is headed by the largest private investors in the world: the American companies BlackRock, with $2.7 billion, and Vanguard with $2.2 billion. In third place is the Qatar Investment Authority with $1.7 billion. US investors also lead the way overall, with a total of $11.5 billion in bonds and stocks of Chinese GCEL firms. Far behind are investors from the UK, such as HSBC and Schroders, with $1.3 billion. Other large European investors include the Norwegian Pension Fund with $562 million and the Swiss investor Pictet ($219 million) and UBS ($192 million).
China Energy is one of the companies with the largest amount of investment from abroad ($1.8 billion). The company is one of China’s coal giants with about 160 gigawatts of installed coal capacity and 510 million tons of coal production. China Energy is developing new coal-fired power plants with a total capacity of 54 gigawatts, including 2.8 gigawatts in Indonesia, and is planning new mines in China and Australia.
Allianz ranks 18th among international investors with $217 million. Europe’s largest asset manager has adopted a comprehensive carbon policy, but this does not apply to its subsidiaries and third-party investments. French rival AXA is further along in this regard, only ranking 73rd with just $39 million. In total, 16 German investors have invested $403 million.
Among them is Deutsche Bank, which, in addition to $94 million in investments, is also involved in financing China’s coal sector to the tune of $410 million and ranks 19th internationally. Although Deutsche Bank adopted its first coal policy in 2020, which also excludes coal at the corporate level, it does not go far enough. Hopefully, it will follow examples such as Italy’s UniCredit, which does not appear in the ranking at all.
Despite announcements to protect the environment and the climate, China continues to build coal-fired power plants, some of which will not go into operation until 2025 and will continue to emit carbon dioxide until 2065, with an average operating life of 40 years. Four of the five largest coal-fired power plant developers in the world are Chinese companies. They have a combined 121 gigawatts under construction and in planning: China Energy, China Datang, China Huaneng and China Huadian. This is no longer about power supply in China itself. No, China is now the world’s largest developer of coal-fired power plants abroad. In countries like Bangladesh and Pakistan, China is even the main driver of the expansion and establishment of the coal industry. International financiers can be found for all of China’s internationally operating coal companies.
China is being sanctioned and financed at the same time: The US and Europe stand out in both cases. The historically largest carbon emitters are thus financing the largest current climate polluter. And this does not only concern China’s coal industry: As Urgewald’s research shows, investments are also made in China’s oil and gas sector.
If we can limit global warming to 1.5 degrees and protect our planet’s biodiversity, the expansion of the fossil fuel industry must stop. In October, the indicators for implementing the Aichi Protocol on the Protection of Biodiversity are to be defined. A stop to the further financing of fossil companies, above all, the coal industry, should be included here.
Dr. Nora Sausmikat and Katrin Ganswindt work at the NGO Urgewald e.V. The sinologist Sausmikat is active at the China Desk and works on campaigns on multilateral financial institutions, especially the Asian Infrastructure Bank (AIIB). Ganswindt is dedicated to campaigns on coal exit and divestment and is involved in data research for the Global Coal Exit List, which breaks down the global coal industry.
Water hyacinths cover this river in Quanzhou, Fujian province. At least until the dam, which has stopped the spread of the plants for the time being. The hyacinths are considered a nuisance, but they also have a good quality: They filter toxins out of the water. In any case, the sight of the green carpet in the middle of the city is spectacular.
The contrast is startling. In the mid-1960s, China’s mothers still gave birth to an average of six children. Today, they have only 1.3 children, as the analysis of the current census shows. As the number of young people shrinks, so does consumption in the long term – a trend that company executives should keep on their radar. Meanwhile, experts have doubts about the figures: There may be even fewer children born than reported. Nevertheless, the now available data is the most valuable information we have about China’s population, explains Felix Lee. A census like this only takes place every ten years.
China and Australia are still in conflict. Beijing wants to reduce its dependence on ore supplies from Down Under, to put the rebellious partner under pressure more effectively. But even high investments in Guinea will not bring the desired independence, as Frank Sieren reports. Australia has particularly rich deposits of high-quality iron ore.
While demand for EVs is booming, Tesla has decided to forgo the originally planned expansion of its factory in Shanghai for the time being. The company wanted to supply the US market from there. But the trade dispute makes that seem less advisable.
Until now, it was an assumption. Now, it is official: China’s population is growing more slowly than it has in decades. And even if, contrary to reports in some Western media, the population did not shrink last year, this situation will occur in the next few years. No one doubts that anymore.
The decennial census released Tuesday showed the population of the world’s most populous country to date has risen 5.4 percent in the past decade to 1.41 billion. The statistics office has not released annual figures. That is the slowest increase since the 1950s.
The reason for this is the further decline in the birth rate. Statistically, a woman has 1.3 children. The rate is thus on a par with Japan, Italy and Germany, the societies worldwide that are currently aging the fastest. The problem is that while these countries have reached a level of prosperity that will ensure sufficiently high pensions, at least in the next few years, the People’s Republic is aging before private households have accumulated enough assets to be provided for in old age.
And what’s more: “Population growth will continue to slow down in the future,” confirmed Ning Jizhe, Head of the National Bureau of Statistics, at the presentation of the results. However, Ning would not name when China’s population is expected to peak. It is still “uncertain,” he said. At the same time, however, he revealed that only 12 million births were registered in 2020, compared with 15 million in 2019. The number of deaths, on the other hand, is rising slowly but steadily. It was still at 7.26 million in 2019 but at 7.4 million a year later. Immigration plays no significant role in these figures because it happens rarely.
What the distortion of the population pyramid into a mushroom shape means for companies on the Chinese market is comparatively easy to see and has been known for some time. For quite a while, the group of middle-aged consumers whose children are already out of the house (“Working Age Empty Nesters“) will grow the fastest. They like to treat themselves – from small luxuries to big trips. Urbanization also continues, creating new consumers moving into the middle class. These families often buy their first better car and other consumer goods. So the market for high-end goods will continue to grow for the foreseeable future. But not indefinitely.
At the same time, the current working generation continues to save a lot of money. They know that society is facing a pension problem. But they only know one safe investment: their own home or other real estates. The bubble in the housing market will thus probably continue to expand. Meanwhile, the potentially lucrative market for retirement annuities will probably remain closed – unless the investment agreement between the EU and China (CAI) works some wonders here.
So far, the United Nations has assumed that the number of people living in the People’s Republic will peak in 2030. But if the trend of recent years continues, this point will probably be reached by the middle of this decade. And China will lose its status as the world’s most populous nation by then. According to calculations, India will overtake the People’s Republic in about four years. According to UN figures, the country currently has around 1.38 billion inhabitants. However, the population in India is growing much faster.
For decades, the Chinese leadership’s doctrine was to curb population growth. Since the early 1980s, it has propagated the one-child policy. For almost 35 years, each married couple in the cities was allowed to give birth to only one child. In the countryside, a maximum of two children were allowed. Those who did not comply faced hefty penalties. Population growth actually declined.
But this development came at a high price – which the country will soon have to deal with. The abrupt introduction of such a rigid population policy will lead to a high proportion of the population retiring in one fell swoop, while the proportion of people of working age will shrink. In 2016, China abolished its decades-old one-child policy.
But this step was taken too late; the shrinkage in the coming decades remains irreversible and is already in full swing. According to official figures, 894 million inhabitants were aged between 15 and 59 last year, five percent less than in 2011, when the number peaked at 925 million. By contrast, the proportion of those aged 60 or over rose by 5.4 percentage points to 18.7 percent, or 264 million.
The late turnaround may be the reason for suspicions that the data may be skewed and that China’s population is growing even more slowly or perhaps already shrinking. But while collecting data on such a large population is not easy, the census data is the best information we have on the Chinese population.
When exactly the tipping point will be reached is not so important. Experts have warned of a “demographic time bomb” for years. The proportion of people of working age in the total population will fall from three quarters in 2011 to just over half in 2050. According to economists, that will hurt productivity. “Our projections, based on pre-census figures, already indicated that the working-age population would shrink by 0.5 percent a year until 2030, with similar effects on gross domestic product,” write analysts at Capital Economics, for example. High economic growth rates can then no longer be expected.
This development could also have repercussions on geopolitical competition. While China’s population is shrinking, the US will grow by 15 percent by 2050, according to the UN. Slower growth in the People’s Republic would make it more difficult to catch up with the United States economically, the analysts at Capital Economics write. And China’s central bank also concludes: “Education and technological progress cannot compensate for population decline.”
COP 15, the United Nations Conference on Biodiversity, was due to take place on 17 May. Now it has been postponed until October. The digital venue will be Kunming in southern China. A success to protect the remaining biodiversity would be a “Global Deal for Nature”. In other words, everyone must pull together. The same applies to curbing climate change, as all parties reiterated at US President Joe Biden’s climate summit. At the national level, China seems to be playing its part: It has had a climate change law since 2007, and in 2020 President Xi Jinping announced that China would be carbon neutral by 2060.
But China’s coal industry is booming and the climate and biodiversity goals are receding into the distance. Producing and burning coal harms the environment and thus endangers biodiversity. Moreover, coal burning is still the largest source of carbon emission, responsible for about one-third of the temperature rise to date. However, coal accounts for about 60 percent of China’s electricity consumption to date, and at over 1000 gigawatts, China operates half of the world’s coal-fired power plants. In 2020, 38.4 gigawatts of new coal capacity also came online. A further 206 GW are under construction and in planning, representing 41 percent of global coal-fired power plants under development.
What is wrong is the popular belief that the West cannot change anything in China anyway and has nothing to do with the direction of China’s energy production. That China is the EU’s largest trading partner and, therefore, many of our goods are produced with Chinese coal-fired power is reasonably well known. Less obvious are the global financial flows: Even though Chinese coal companies are mainly funded domestically, foreign financiers also support China’s coal industry in the Middle Kingdom. According to Urgewald research, 467 international financial institutions have financed Chinese companies listed on the Global Coal Exit List (GCEL). This is according to Urgewald’s February 2021 financial research, which investigated the banks and investors behind the companies on the Global Coal Exit List (GCEL). Everyone is pulling in the same direction here, but unfortunately, in the wrong direction.
A tenth of the money that flowed into China’s coal sector in the last two years has come from abroad. 48 international banks have provided $21.7 billion for China’s coal industry. The lion’s share of this sum was provided in the form of underwriting, i.e., by issuing shares and bonds.
By far the largest financiers from abroad come from the UK and the US. British banks such as HSBC and Standard Chartered have lent $5 billion and US banks such as JPMorgan Chase and Citigroup are only just behind with $4.9 billion. Banks from Japan, Switzerland and France have also sunk over $2 billion each into the Chinese coal sector. Among the biggest recipients of foreign money is China Huaneng, with $1.2 billion. The company has installed more than 100 gigawatts of coal-fired capacity and plans to add another 32 gigawatts. 439 investors have invested $19.6 billion worth of stocks and bonds in Chinese GCEL companies as of January 2021. This exceeds the investments of country-owned financial institutions by $2 billion.
The ranking is headed by the largest private investors in the world: the American companies BlackRock, with $2.7 billion, and Vanguard with $2.2 billion. In third place is the Qatar Investment Authority with $1.7 billion. US investors also lead the way overall, with a total of $11.5 billion in bonds and stocks of Chinese GCEL firms. Far behind are investors from the UK, such as HSBC and Schroders, with $1.3 billion. Other large European investors include the Norwegian Pension Fund with $562 million and the Swiss investor Pictet ($219 million) and UBS ($192 million).
China Energy is one of the companies with the largest amount of investment from abroad ($1.8 billion). The company is one of China’s coal giants with about 160 gigawatts of installed coal capacity and 510 million tons of coal production. China Energy is developing new coal-fired power plants with a total capacity of 54 gigawatts, including 2.8 gigawatts in Indonesia, and is planning new mines in China and Australia.
Allianz ranks 18th among international investors with $217 million. Europe’s largest asset manager has adopted a comprehensive carbon policy, but this does not apply to its subsidiaries and third-party investments. French rival AXA is further along in this regard, only ranking 73rd with just $39 million. In total, 16 German investors have invested $403 million.
Among them is Deutsche Bank, which, in addition to $94 million in investments, is also involved in financing China’s coal sector to the tune of $410 million and ranks 19th internationally. Although Deutsche Bank adopted its first coal policy in 2020, which also excludes coal at the corporate level, it does not go far enough. Hopefully, it will follow examples such as Italy’s UniCredit, which does not appear in the ranking at all.
Despite announcements to protect the environment and the climate, China continues to build coal-fired power plants, some of which will not go into operation until 2025 and will continue to emit carbon dioxide until 2065, with an average operating life of 40 years. Four of the five largest coal-fired power plant developers in the world are Chinese companies. They have a combined 121 gigawatts under construction and in planning: China Energy, China Datang, China Huaneng and China Huadian. This is no longer about power supply in China itself. No, China is now the world’s largest developer of coal-fired power plants abroad. In countries like Bangladesh and Pakistan, China is even the main driver of the expansion and establishment of the coal industry. International financiers can be found for all of China’s internationally operating coal companies.
China is being sanctioned and financed at the same time: The US and Europe stand out in both cases. The historically largest carbon emitters are thus financing the largest current climate polluter. And this does not only concern China’s coal industry: As Urgewald’s research shows, investments are also made in China’s oil and gas sector.
If we can limit global warming to 1.5 degrees and protect our planet’s biodiversity, the expansion of the fossil fuel industry must stop. In October, the indicators for implementing the Aichi Protocol on the Protection of Biodiversity are to be defined. A stop to the further financing of fossil companies, above all, the coal industry, should be included here.
Dr. Nora Sausmikat and Katrin Ganswindt work at the NGO Urgewald e.V. The sinologist Sausmikat is active at the China Desk and works on campaigns on multilateral financial institutions, especially the Asian Infrastructure Bank (AIIB). Ganswindt is dedicated to campaigns on coal exit and divestment and is involved in data research for the Global Coal Exit List, which breaks down the global coal industry.
Water hyacinths cover this river in Quanzhou, Fujian province. At least until the dam, which has stopped the spread of the plants for the time being. The hyacinths are considered a nuisance, but they also have a good quality: They filter toxins out of the water. In any case, the sight of the green carpet in the middle of the city is spectacular.
