Chongqing- The National Bureau of Statistics has released the Seventh National Population Census, which provides invaluable insight for the structuring of society, urbanization and industry to achieve high-quality development.
The census highlighted the characteristics of an aging population, eastward migration, labor force, and urbanization of the Chinese population, which will have profound implications for the future of China.
In light of this release, Cushman and Wakefield have produced a report entitled "Demographic changes will profoundly affect the development of China's real estate market". Below are some highlights from the report that describe expected socio-economic impacts for the future development of China.
Huge demand for elderly real estate
The population 60 years old in China has reached 264 million people, accounting for 18.7%. According to the United Nations, regions where 7% of the total population are aged 65 years old and over are considered aging societies.
Changes in the population age structure will become more prominent in the next ten to twenty years. According to Population Pyramid forecasts, the over 65 population in China will exceed 300 million by 2035, accounting for 20.6% of the total.
In contrast to the rising number of elderly people, there is a shortage of elderly care facilities in China. In 2019, the number of elderly care beds per 1,000 people in China was 30.5, far lower than developed countries which number 50.
The growth in demand for elderly care along with the first batch of middle-class elderly and their imminent retirement needs, the demand for mid-to-high-end elderly care will usher in explosive growth, while the market scale of elderly real estate will further expand.
Cooperation between real estate developers and healthcare providers will further segment the market, which will provide a major foundation for the opening up of retirement real estate in the future.
The rate of urbanization is expected to stabilize at 15 million people per year during the 14th Five-Year Plan. (iChongqing/ James Alexander)
Construction of high-speed rail and transit
China’s population has gradually concentrated in the east over the past decade, as the eastern region has seen an increase of 2.15 percentage points compared with 2010, reaching 39.93% of the national total. This amounts to a population increase of nearly 45.94 million, similar to the entirety of Jiangxi or Yunnan Province.
In sharp contrast to the east, the northeast region has seen a population decrease of 1.2% a decade ago, meaning that over 13.57 million people have moved away from their northeastern homeland in the past decade.
Population migrations are closely related to economic development activity, so as the eastern region has more developed a more dynamic economy, it has attracted greater populations into what are already relatively mature urban agglomeration.
In the future, the construction of urban agglomerations in China will promote the development of Inter-city high-speed rail and transit systems, connecting the flow of people and logistics, and in turn driving the further agglomeration of regional populations and industries.
Technological innovation drives economic development
From 2010 to 2020, the working population aged 15-59 has dropped from 70.14% to 63.35%, meaning that the Chinese workforce has decreased by nearly 67 million, and the issue of demographic dividend will pose difficulties for the future of economic development in China.
Labor-intensive industries will gradually adopt technological innovation, and high-end manufacturing will become a key development path for China in the future.
Continuous development in the tertiary industry has increased the demand for office buildings. The stock of Grade A office buildings nationwide increased from 19.65 million square meters in 2010 to 64.48 million square meters in 2020.
In the future, continued development of high-end manufacturing and strong support for scientific research and innovation means the demand in the office market will maintain strong growth.
Continued migration will drive the construction of intercity rail and transit to connect people and logistics. (iChongqing file photo)
Driving force for economic growth
The rate of urbanization in China has risen from 49.7% to 63.9%, with an average of more than 20 million people moving into cities from rural areas each year. During the 14th Five-Year Plan, the process of urbanization is expected to slow down and achieve stability at a rate of 70%. Since there will still be nearly a 10% scope for population growth, 15 million people will continue to enter the cities each year.
Such migrations will promote the development of regional economies in consumption, housing, and the construction of urban infrastructure. Based on this premise, the development of a new harmonious development pattern for urban-rural coordination and industry will power economic development in China.