The debate in Hong Kong on its population policy is continuing. We’ve mentioned it before on this blog, and the debate isn’t dying down at all.   The South China Morning Post continues to debate the options and likely outcomes for a city which has one of the lowest fertility rates in the world.  As the article states, Hong Kong’s population growth is drying up and the population is growing older:

“The city’s population has grown very slowly and is ageing fast. With a population of over 7 million, of which there are 312,000 foreign domestic helpers (8 per cent of the labour force) and an unemployment rate of just over 3 per cent, the labour force will begin to peak in 2018 and steadily decline as the population ages. By 2041, one in three will be over the age of 65.”

This population slowdown and ageing has a massive impact upon the economic outlook of the city:

“The current average gross domestic product growth rate of 4 per cent per annum comprises 1 per cent growth due to workforce growth and 3 per cent from productivity growth. When the labour growth rate turns negative after 2018, productivity growth will have to increase substantially for Hong Kong to maintain its growth rate.”

What could potentially be one way to square the circle of maintaining economic growth while the workforce is declining is to engage those in working age population who are not working, particularly among the elderly.

“An intriguing statistic is the low labour force participation rate of 58.8 per cent, slightly lower than Japan’s and over 7 percentage points lower than in Singapore.  Certainly, the Hong Kong labour force seems to retire earlier than its competitors, with a 61.7 per cent participation rate for those aged 55-59, compared with 78.3 per cent in Japan. In the 60-64 age range, only 37.7 per cent of our labour force is working, compared with 58.1 per cent in Singapore.”

Surprisingly, the steering committee has also mentioned those that are “economically inactive” in the 15 and 64 year old age bracket.  Apparently there are 1.6 million among this age range. But as the article points out, this places all women who are not working in order to raise a family in the “economically inactive” category. This seems particularly near-sighted when Hong Kong is trying to grapple with the consequences of a declining working age population! 

What could also have a major impact upon Hong Kong in the next few years is the relaxation of the one child policy in mainland China.  The article asks whether the city can “continue to serve a growing mainland and neighbouring economies effectively and competitively?” However, as we’ve shown recently, the link between the demise of the one child policy and a growing Chinese population should be doubted. It will be interesting to see what outcomes the Hong Kong policy review will come up, as many countries in the world are facing similar problems and might see Hong Kong as a good testing laboratory of ideas!

Marcus Roberts is a Senior Researcher at the Maxim Institute in Auckland, New Zealand, and was co-editor of the former MercatorNet blog, Demography is Destiny. Marcus has a background in the law, both...