Context:

A reasonable size and structure of the youth population (aged 14 to 35) are an important foundation for social development in China. China’s demographics are changing as the fertility rate continues to decline, the population is aging, urbanization is accelerating, and population mobility is intensifying. Significant intergenerational and interregional differences in the size and structure of the population require further attention.

Key points:

Characteristics and Changes of China’s Youth Population

• The co-occurrence of a declining youth population and an increasingly aging population has imposed structural challenges on social development. According to the first census in 1953, the youth population was only 196 million. It reached its peak of 491 million in 2000, according to the fifth census, after which a downward trend began. At the end of the 1980s, the proportion of Chinese people over the age of 65 grew relatively faster than other population sectors. In 1953, the population over the age of 65 was only 4.41 percent; in 2000, it rose to 6.96 percent; and in 2020, it reached 13.50 percent. The decline in the youth population is partially a result of China's one-child policy and rapid economic growth with a corresponding social transformation.
• Comparing China to the world’s population age groups, the proportion of China’s youth has declined significantly and is growing closer to that of Japan and other developed countries with serious aging problems. In 2020, the global population of those 14 to 35 years-old was 2.65 billion, but China's youth population accounted for only 16.43 percent, about 8 percentage points lower than the peak level reached in 1986. In 2025, according to statistical models, China’s youth proportion will drop to 14.58 percent, 13.58 percent in 2030, and only 11.15 percent in 2050. Although India's youth population will also trend downward after 2027, it will still be 16.82 percent in 2050. The gender ratio of China’s youth population is also in a state of imbalance.
• The rapid urbanization after the reform and opening up drove more young people to urban areas. In 1982, the domestic migrant population was only 6.57 million; the seventh population census shows that this figure has increased 57 times to 376 million. For the youth population, this translates into 22.53 percent in 1982 and 71 percent in 2020. The gender breakdown indicates that there are more female youth than male youth.

Challenges Hidden in these Changes and Potential Solutions

• With a declining female youth population, a high unwillingness to marry, and low fertility rates, the declining birth rate fluctuates. Even if the fertility rate increases in the future, the size of the youth population and its proportion of the total population will continue to decrease in the long run, which may widen the development gap of the youth population in different regions, causing negative impacts on rural revitalization and common prosperity. Also, a larger number of unmarried men in rural areas may bring potential problems to the governance at the grassroots level.
• In the face of these challenges, China should redefine the culture of marriage, reduce the cost of childbirth, childcare, education, and other economic necessities to solve the practical problems facing the youth of marriage age. Gender-biased sex selection for non-medical reasons should be stopped, to ensure gender equality and reverse the long-term imbalanced gender ratio among newborn babies. We should also accelerate the development of high quality public services in central and western regions and rural areas to encourage youth to return to their hometowns for employment and entrepreneurship.

Context:

The real estate market is facing a serious crisis. Key indicators in several segments, from land purchasing to construction to sales, have seen severe negative growth in the first half of 2022. Some real estate development companies were unable to deliver occupancy-ready housing, and homebuyers stopped payment on their mortgages. Government intervention and supervision are beginning to address these issues. In this article, the author discusses his perspective on the development of today’s real estate market and forecasts the trends for the market’s future.

Key points:

• During the 1990s, the following three policies provided huge supply side economic stimulation and set the stage for the rapid development of China’s real estate market in the following two decades: 1) allowing local governments to collect revenue from selling land usage rights, 2) stopping the distribution of public housing to promote the commercial housing market, and 3) nationalizing collectively owned rural land and making it available for construction. With China's accession to the WTO in the early 2000s, rapid economic growth, urbanization, and investment stimulated residential demand, causing rising home prices.
• In the last 20 years, the boost from the real estate market positively influenced national economic growth. However, the dependence on the real estate market for this economic growth also significantly increased, which made policy adjustment difficult and uneven. A variety of problems continued to accumulate, eventually leading to today's crisis.
• Relying on continuously rising home prices is not a sustainable growth model for four reasons: 1) Housing prices are unaffordable in some cities; this has the potential to cause social issues such as homelessness and political instability. 2) With the increasing urbanization rate and an aging population, housing inventory in third and fourth-tier cities has increased significantly; the oversupply problem is gradually becoming prominent and could create an inequality gap. 3) Some real estate companies are on the verge of bankruptcy due to large-scale debt and no longer have the funding for land purchases. 4) Revenue from land sales, which contribute to 40 percent of local government income, is decreasing while the systematic risk of local hidden debt is expanding. It is time to change the model of “Land Finance”.
• In order to reform the real estate market, first, we should adhere to the principle that President Xi has emphasized— "houses are for living, not for speculation"— treating houses as consumer goods rather than financial investments. Second, a sufficient supply of public rental housing and government-subsidized housing should be guaranteed to low-income groups, especially migrant workers. Third, the government must ensure occupancy-ready home delivery to create stability in the national real estate market. Last, but not least, a dedicated group should be organized to propose a long-term mechanism and policy system for the healthy development of China's real estate market.
• The government will not offer infinite financial support to real estate companies. Based on the premise of ensuring social stability, a group of real estate companies, which have long performed poorly, must be liquidated.