Has China passed its zenith? The number of Chinese people started its descent

Today we proudly presented our Webinar about Chinese Outbound Tourism in the Year of the Water Rabbit. If you missed it, it is still available as a video on Youtube:

https://www.youtube.com/watch?v=FjCdVRL2I48

We also finished the text for our eBook, which will be published to celebrate Chinese New Year on Sunday, January 22nd, 2023.

More about the content of the eBook in the COTRI Weekly next week. Fortunately, the opening of the Chinese borders has resulted in a lot of attention and articles, many including COTRI numbers or quotes from your humble editor. You could find some in last weeks’ edition and you will find more in this week’s edition.

Therefore, let us at the beginning of the year not discuss how a government can count first 37 CoViD deaths in the last four weeks and then say that accidentally the number is not completely correct: 60,000 is the right one (probably it will still turn out later that they forgot a “0” at the end of that number).

Instead, let us look a bit further ahead. According to new numbers released by the National Bureau of Statistics, China’s population fell last year for the first time in six decades. The 1.41260 billion persons living in Mainland China (without Hong Kong SAR, Macau SAR and Taiwan) in 2021 can be expected to be the highest ever reached in China. Even this number was achieved by a record low increase of just 480,000, a drop in the ocean compared to the annual growth level of eight million and more when Xi Jinping came to power a decade earlier.

Now we will see the start of a long period of decline in its citizen numbers, with India becoming the world’s most populous nation in this year already. As recently as 2019 the China Academy of Social Sciences expected the population to growth until the end of the decade, reaching a peak in 2029 at 1.44 billion. The 2019 UN Population Prospects report expected the peak even in 2032 with 1.46 billion citizens as the zenith figure.

In fact, according to the National Bureau of Statistics, China’s population dropped by a bit less than one million persons, namely 850,000 to 1.41175 billion at the end of 2022. Last year’s birth rate was 6.77 births per 1,000 people, down from a rate of 7.52 births in 2021 and marking the lowest birth rate on record. China also logged its highest death rate since half a century, registering 7.37 deaths per 1,000 people, almost two point higher than the rate of 7.18 deaths in 2021.

China’s total fertility rate (births per woman) stood at 2.6 in the late 1980s, dropping below the 2.1 needed to replace deaths in the early 1990s and all the way down to just 1.15 in 2021. This rate is not only lower than the fertility rate in Australia and the United States (1.6) but even below ageing Japan’s rate of 1.3. The end of the One-Child policy in 2016 and the introduction of incentives for couple to have several children including tax deductions, longer maternity leave and housing subsidies, did not have any effect on that downward trend.

Rearing children is very expensive in urban China and endangers the career of the mother more than in other countries. High youth unemployment rate, weaknesses in income expectations and the lockdown experiences are likely to delay marriage and childbirth plans further, for many even forever.

Many of the poorer, uneducated young women in the countryside, who would be expected to have more children, are migrant workers living in bigger cities and could not risk to give birth to children they could not take care of, as the grandparents are far away in the villages.

The Shanghai Academy of Social Sciences expects this rate to stay stable for the rest of the century, which would bring down the population to 587 million in 2100, back to the level of 1954. This assumption however is counting on a stable death rate, which is probably too optimistic, as the economic consequences of the shrinking and ageing population and especially the effects of the climate catastrophe will bring down the quality of healthcare and nutrition. The several millions of deaths occurring due to CoViD-19 in 2023 are also not accounted for in the calculations of the SASS.

China seems to have reached its zenith also in other ways. The number of its international friends is dwindling with the country and its growing military might triggering rather fear than awe. Economic growth is down to officially 3% GDP increase in 2022 and very unlikely to jump over the 5% hurdle in the foreseeable future. At the same time the demographic dividend of having a young population is turning ever faster into a burden, with the proportion of 60+ citizens doubling between 2010 with 13% to 26% in 2030.

Does that mean that the zenith of China’s outbound tourism had been reached as well in 2019 without anybody noticing? No. China’s Top 10% are still rich enough to travel internationally for leisure and the integration of China into the global economy will intensify again, as the domestic market will grow less than wished for by the governments “Dual Circulation” development dreams. That will trigger more business trips as well.

The growth of the famous “middle class” which has been predicted by McKinsey and Co. since many years, will become clearly visible as the Fata Morgana it has been from the beginning. Therefore, the number of Chinese travellers reaching levels of affluence to allow them intercontinental trips will not grow as fast as before. The marketing will have to concentrate more on repeat visitors than on attracting newcomers, especially for already established destinations.

Young travellers and young couples with child(ren) will become less important. The “Generation A”, following Gen Z, will not be so influential than Gen Z has been in the 2010s – another zenith reached, nicely presented by running out of letters of the alphabet.

Accordingly, the affluent senior citizens, or Best Agers, or Silver Travellers, will become more important as target market segments, especially for long-distance travel. They have special interests they want to follow. Many of them missed out on a university education because of the Cultural Revolution and are happy to join “Senior University” tours, combining slow-paced sightseeing and relaxation with some lectures and cultural events.

In the COTRI Outbound Tourism Training we taught participants since many years that Education and Health will be the key topics for the 2020s. This is still true, with “Education” not only for kids but also for seniors, where it can be combined nicely with “Health” as well.

In a nutshell, the future is bright for China’s outbound tourism for the rest of the decade and that is probably what most of our readers care for.

The immediate future also offers after our webinar this week already another high level discussion of China’s Outbound Tourism: On Tuesday, January 24th, the “Chinese Tourists” webinar will see Dr. Taleb Rifai, former SG of UNTWO opening a panel full of experts. Your humble editor has the honour to provide the keynote, followed among others by the co-author of the COTRI eBook, Gary Bowerman, but also representatives of the tourism administrations of Laos, Nepal and the Mekong region as well as university professors from Hong Kong, Malaysia and Australia.

The focus will be on Southeast Asia, but the presentations will give insights for viewers wherever they are in the world.

The webinar starts at 8 a.m. NYC time / 2 p.m. Berlin time / 5 p.m. Dubai time.

Details and free registration: https://tourismwebinar.com/China/

As always, best wishes from Prof. Dr. Wolfgang Georg Arlt FRGS FRAS and the entire COTRI Weekly team (which happily welcomes some new members this week) to all our readers!

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