For hundreds of years, China has been able to boast of having more people than any other country. The title became official in the 1950s, when the United Nations began collecting such data. Such a large population gave China some bragging rights. The huge supply of labor also helped fuel its annual GDP growth, which has averaged close to 9% over the past three decades.
China’s reign ended last month. India has surpassed it as the world’s most populous country. The demographic trends underlying that shift have troubling consequences for the new number two. China’s working-age population has been shrinking for a decade (see chart). The total population decreased last year and is aging rapidly. This situation is likely to hinder economic growth and create a huge care burden.
Still, when Beijing officials ponder the solutions, there is one that seems largely absent from the debate: immigration. China has a surprisingly low number of foreign-born residents. Of its 1,400 million inhabitants, around one million, that is, only 0.1%, are immigrants. That percentage contrasts with 15% in the United States, 19% in Germany and 30% in Australia. China’s figure still seems insignificant compared even to other Asian countries that are also reticent about immigration. Foreigners make up 2% of Japan’s population and 3% of South Korea’s. Even North Korea has, according to the United Nations, a higher proportion of immigrants than China.
China’s future economic and social needs are similar to those that have led other societies to receive foreign workers. In January, the government published a list of 100 professions, such as salesperson or cleaner, that are understaffed. According to a survey, more than 80% of manufacturers suffered from labor shortages in 2022. Nearly half of China’s 400 million blue-collar workers are over 40, according to a study conducted last December. The data coincides with an official estimate according to which China will have difficulties to fill almost 30 million jobs in the manufacturing sector between now and 2025.
China has a surprisingly low number of foreign-born residents: Of its 1.4 billion people, only 0.1% are immigrants.
In the past, the abundance of cheap young workers served to fill those needs. However, as China ages and shrinks, the available labor supply dries up as well. Companies complain about the mismatch between the jobs sought by young people, of whom an increasing number hold college degrees, and existing jobs. Many young Chinese don’t want to work in factories, laments china daily, a party organ. This explains why almost 20% of urban youth between the ages of 16 and 24 are unemployed.
China could make better use of its current population. The country is under-urbanized, and rural dwellers are less educated than in advanced economies. There is no doubt that higher wages and fewer restrictions on internal migration would help a great deal. However, even young people from rural areas seem less willing than in the past to move to the cities to do manual work.
In many other countries, immigrants do jobs that pay so little that they do not attract the local population. Immigrants have also contributed to alleviating the burden of an aging population. Japan, for example, has allowed the entry of foreign caregivers to care for their elders. China faces an even greater challenge in that regard. Unlike Japan, it hasn’t gotten rich before it gets old, and will have to deal with mounting health and social care bills.
The country admits that it needs more young people. The government has tried to convince citizens to have more children, but has not been very successful. Chinese women have, on average, less than 1.2 children, well below the 2.1 needed to keep the population stable.
In addition, the state has made little effort to attract foreigners. In 2016, it established a three-tier point-based system for work permit applicants. The lowest level, class C, includes those with relatively little training and work experience. Those permits are difficult to obtain. “Promote above, control in the middle and limit below,” read a state slogan from the time the system was introduced.
The country admits that it needs more young people: the government tries to convince the Chinese to have more children, but without much success
However, even at the top there are great obstacles. The country’s green card system, introduced in 2004, is limited and complex. Its aim was to prevent foreign workers with high resources or qualifications from having to reapply for visa renewal every year. In practice, only about 11,000 ten-year residence permits were issued between 2004 and 2016, the latest year for which data is available. During that same period, the United States, with a quarter of the Chinese population, issued nearly 12 million green cards.
Since then, China has created a national immigration agency and has tried to ease the residency application process. However, the requirements remain high: applicants are required to invest at least $500,000 in a Chinese company for three consecutive years, be married to a Chinese citizen, have made or are making a significant contribution to the country, or own skills that are especially necessary. None of it helps Chinese manufacturers fill jobs.
long live relatives
The truth is that China is not interested in becoming a melting pot for immigrants. In part, one explanation may be foreign mistreatment suffered by the country in the past. However, opposition to multiculturalism also feeds on claims to ethnic purity that nationalists have long propagated. Officials boast of the existence of a single Chinese lineage thousands of years old. In 2017, Xi Jinping, the country’s supreme leader, told Donald Trump, then president of the United States: “We are the original people, black hair, yellow skin, inherited and transmitted. We call ourselves the descendants of the dragon.”
That frame of mind shapes immigration and naturalization policy. An overwhelming proportion of residence permits go to foreigners of Chinese descent. Similarly, children of Chinese citizens born abroad receive special treatment when applying to Chinese universities. The Thousand Talents program to attract university students from abroad recruited nearly 8,000 scientists and engineers between 2008 and 2018. All but 390 were Chinese-born returnees, according to the Brookings Institution, a US think tank.
Citizenship is virtually barred to foreigners, unless they are the children of Chinese citizens. Chinese residence permits, unlike American ones, do not offer a path to naturalization. China only had a total of 16,595 naturalized citizens in 2020. Japan, by contrast, naturalizes about 7,000 new citizens every year. In the United States, the number exceeds 800,000.
Public attitudes make further openness difficult. In 2020, a proposal to ease access to residency for wealthy or skilled foreigners faced a populist backlash in which men vowed to protect Chinese women from immigrants. In general, the state encourages a closed mentality. A national security campaign warned Chinese women that foreign boyfriends could be spies; officials, for their part, blame “foreign influences” for what they perceive to be social ills.
Citizenship is virtually off-limits to foreigners and it’s a shame: more lax immigration policies would help with labor shortages
And there is also the one-child policy, which was not abandoned until 2016. Now couples are allowed up to three children. Few want so many. However, it can be difficult to convince a generation raised on, and marked by, population control that large immigrant arrivals are desirable.
It’s a shame. Easier immigration policies wouldn’t just help employers suffering from labor shortages. They would also encourage innovation. Google, LinkedIn and Tesla were founded by immigrants in the United States. The point is that bright young minds studying in China from abroad have a hard time getting a visa once they graduate. For their part, many Chinese students study in the West and end up staying there.
Interestingly, the main route to obtain Chinese citizenship now seems to be sporting excellence. Around a dozen soccer players, most with no family ties to China, were naturalized in 2019 and 2020 in an unsuccessful attempt to qualify for the country in the Soccer World Cup. Another handful of athletes, most with a Chinese-born parent, obtained citizenship before the 2022 Winter Olympics. Labor shortages in less glamorous trades could soon force authorities to consider admitting newcomers. they will never win a medal.
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Translation: Juan Gabriel López Guix