A national newspaper columnist says the expected decline will bring ‘nothing but bad news’ for the world’s economy
Since about 2005, countries that export agricultural commodities have focused on three things: China, China and China.
Australia, Canada, the United States and Brazil have directed their gaze toward China and succeeded in selling more pork, oilseeds, grains and beef to the world’s largest importer of commodities.
China’s role as the most important market for agricultural commodities should persist, for a while.
But it won’t last forever because China’s population is about to shrink, says John Ibbitson, a Globe and Mail columnist.
Research from 2019 suggests China could peak at 1.4 billion people in 2023 and then decline, dramatically, over the next 75 years.
“Three years from now, China’s population starts to go down. Once it starts to go down, it will never stop (declining),” said Ibbitson, the keynote speaker at the Keystone Agricultural Producers annual meeting held in early February in Winnipeg.
Right now, China’s official fertility rate is about 1.5 to 1.6 children per woman. The replacement rate, needed to maintain the population, is 2.1.
Since China doesn’t allow immigration, it’s inevitable that the population will drop.
The only questions are: how much and how fast?
“If those numbers are right, if China stays at 1.5 to 1.6 (children per woman) through the course of this century, it loses 300 million people by (2100),” said Ibbitson, who has co-authored a book with demographic expert Darrell Bricker: Empty Planet, The Shock of Global Population Decline.
But many experts believe China’s birth rate is much lower than 1.5 children per woman.
In surrounding jurisdictions, like Hong Kong, Singapore, South Korea and Taiwan, the birth rate is closer to 1.0.
“All of the countries in southeastern and eastern Asia, surrounding China, have the lowest fertility rates on the planet,” Ibbitson said.
China’s fertility rate should be similar.
If China’s birth rate is already 1.1 or sinks to 1.1 per woman, China’s population would drop off a cliff.
They could lose 600 million people by 2100.
“All the available evidence suggests as China continues to urbanize … their fertility rate will decline,” said Ibbitson, who travelled to six continents to speak to experts and ordinary people for the Empty Planet book.
Plus, China doesn’t permit immigrants and there’s no indication the policy will soon change.
“It’s a cultural thing. Japan is already in serious population decline but Japan is not permitting immigration,” he said. “These are culturally homogeneous societies that value the cultural integrity of being Japanese. Or being Han Chinese.”
Farmers at the Keystone Agricultural Producers meeting listened to Ibbitson for 40 minutes as he spoke about the likely decline of the world’s population and what it means for the global economy and the environment.
For the environment, fewer people will be a blessing.
For the economy, it will be “nothing but bad news,” Ibbitson said.
After the speech, Don Dewar, a producer from Dauphin, Man., asked the obvious question.
Who is going to buy all the food produced in Canada, the U.S. and other ag exporting nations?
“We’re going to have an awful lot of food and fewer people in need of that food, every year,” Ibbitson said in a matter-of-fact tone.
“That’s going to be a challenge for the (ag) industry.”
In the medium term, China should continue to import large quantities of meat, grains, oilseeds and processed foods.
But as the population contracts, the Chinese market will become more competitive and will evolve. China’s aging population will demand high quality and healthy foods.
“Start thinking of your consumers not as young consumers but as older consumers,” Bricker said in 2019.
India, the world’s other country with massive population, may be a better opportunity for ag exporters. Its fertility rate is higher (around 2.2) and gross domestic product growth is similar to China.
“If I were an exporter and I was looking at the Chinese market versus the Indian market, I would say the Indian market is stable and growing,” Ibbitson said. “India, over time, is a much more lucrative market than China.”