China’s working age population of 15 to 64-year-olds is declining for the first time since 2002, and the trend may signal a danger to China’s continued economic growth, according to a Chinese economist.

Cai Fang, a member of the Chinese Academy of Social Sciences and the director of the Institute of Population and Labor Economics, was interviewed by the Economics Information Daily in January 2012.

Cai believes that the birth rate in China has dropped to levels much lower than that in other developing countries, in part because of people “getting old before getting rich.” The dependency ratio—that is, the number of elderly people to working-age people—has been declining since the 1960s, but is expected to begin rising rapidly in 2013.

At that point, China will lose its competitive advantage in labor-intensive industries, Cai says, which will slow economic growth.

Cai Fang used Japan as an example; before 1990, Japan had a Gross Domestic Product growth rate of 9.2 percent. When the demography of the population changed, economic growth dropped to 3.8 percent; and after 1990, when the demographic advantage disappeared, annual GDP growth was only 0.89%, signaling the largest economic crisis in the history of Japan.

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