China faces growing gender imbalance

by the Countries & Consumers team.

China's gender imbalance, resulting from a combination of the one-child policy and the traditional preference for sons, negatively impacts the labour market, income and consumer spending as well as leading to a higher crime rate.

The government aims to create a proper social security system which will alleviate pressures on rural couples who feel the need to have a son to depend on when they get old.

China has the world's largest population with 1.3 billion people in 2009;

The country adopted its one-child policy in 1979 in an effort to curb a population explosion. Families are essentially limited to one child whilst late marriages and childbearing are encouraged. However, due to China's traditional bias towards male children, the practice of sex-selective abortion has since become relatively widespread;

Gender imbalance among newborns is an increasingly serious demographic problem for the country. In 2009, for every 100 girls born in China, 119.5 boys were born. This was significantly higher than the natural ratio of 105 males per 100 females at birth;

As of 2009, China had 33.3 million more men aged under 20 than women aged under 20. In 1980, there were only 12 million more men aged under 20 than women aged under 20 in the country.

**Male and female populations aged under 20 in China: 1980-2009**
Million people

Source: Euromonitor International from national statistics/UN.

Implications

According to a 2009 report by the Chinese Academy of Social Sciences, there will be over 24 million more men than women of marrying age by 2020. These men could find themselves without spouse and have no children;

This gender imbalance, combined with population ageing, is putting pressure on the country's social security system. This is because ageing single people will be more dependent on social security as they have no offspring or household resources to rely on. In 2009, the population aged 65+ accounted for 9.6% of China's total population, compared to 4.7% in 1980;

The gender gap will also have a negative impact on the workforce, as it intensifies structural shortage of skills and increases urban unemployment. Unmarried rural men increasingly migrate to urban areas where the rate of urban unemployment has already risen from 2.5% in 1990 to 4.5% in 2009. Rising urban employment puts downward pressure on wage increase, having a negative flow-on effect on consumer spending;

At a time when China is striving to shift the focus of economic growth from exports to domestic consumption, dampened consumer spending as a result of rising urban unemployment will negatively affect the country's economic growth;

**Real GDP growth and urban unemployment: 1990-2009**
Annual % change; % of economically active urban population

Source: Euromonitor International from the IMF and ILO.

There has been a sharp increase in trafficking of women from other Asian countries into China. Many young girls and women have been kidnapped, and then either sold on as brides to Chinese men or coerced into working as prostitutes. Human trafficking and prostitution can lead to an increasing crime rate and a range of social problems that could undermine social stability and the business environment in China (as well as in the neighbouring Asian countries from where women are kidnapped).

Prospects

The Chinese government is aware of the problems of gender imbalance:

In 1997 the government outlawed sex-selective abortion, and subsequently in 2005 the practice was made part of the criminal code. The government is proposing to tighten the law even further to ensure the ban is effective;

The government is also working towards creating a proper social security system. As a step in this direction, China announced in 2009 a US$123 billion plan to establish universal healthcare by 2011 for rural and urban areas;

Meanwhile, further actions will be required to transform the pension system. As of 2010, the state pension system covers only 55% of employees in urban areas and leaves most of the rural population uncovered. A comprehensive social security system will help to alleviate pressures on rural couples who feel the need to have a son to depend on when they get old. Euromonitor International forecasts that by 2020 the proportion of people aged 65+ is to account for 13.1% of the Chinese population, up from 9.6% in 2009.