Photo via the South China Morning Post
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Currently sitting at the second most populated country in the world, China is home to about 1.4 Billion people. Despite this large number, however, it seems China no longer has an overpopulation issue like it did in the past. Instead, it is now faced with a serious declining birthrate problem, largely because the death rate is currently higher than the birth rate. Due to the abundance of older populations compared to younger generations, there are an estimated 90 million empty housing units in China—with no individuals to fill them.
To truly comprehend China’s housing surplus, it is important to establish the origins behind the declining birth rate. The decline in China’s fertility and birth rates can be largely attributed to the high financial burden that comes with raising a child in China. The expenses are so high, in fact, that younger generations are now finding it less appealing to start families. These choices are not without consequences, however. Not only will younger people’s choices to not have children contribute to a steep decline in the population in the future, but they will also deeply impact China’s economic growth potential, innovation vitality, happiness index, and national rejuvenation.
Though an expensive economy has definitely contributed to the birth rate decline, it is important to note that the One Child Policy is also to blame. Following the implementation of this policy, China matured much faster in terms of development than other major global economies. Despite this, with the decrease in Chinese women having children, economic growth is being threatened, and the generation of individuals who grew up without siblings due to the One Child Policy are now reluctant to have children themselves.
With birth rates at a new low in China and death rates only continuing to grow, it is safe to say filling the country’s 90 million empty housing units will be nearly impossible. According to the Wall Street Journal, estimating a number of three people per household, China currently has enough empty housing for the entire population of Brazil, all while its population is expected to drop by 204 million over the next 30 years.
The big question here is: what will China do with all this empty property? Many have suggested that some of these empty housing units will be bought up and lived in if the Chinese government provides support to convince buyers that their value will rise again. This strategy will encourage people who are specifically looking to get value out of the property they buy. But while experts say most of the empty houses will not pose a problem filling up in major cities like Beijing, Shanghai, and Shenzhen, this issue will be much harder to solve in smaller cities due to their weaker economic prospects and declining populations.
As stated by the South China Morning Post, “The market is facing an oversupply situation as vacancy rates hold near all-time highs…Office vacancy rates continued to worsen last month in more business districts in the city including Central, Wan Chai, Causeway Bay and Tsim Sha Tsui, JLL said in its latest report. Rents fell by 1.1 per cent from August.” This indicates that this housing glut has already begun to negatively affect China’s economy, and could potentially continue if nothing is done about both the property vacancy issue and the continued decreasing population.
Ultimately, China’s problematic housing surplus ties directly back into the issue of the country’s declining birthrate. It is important to recognize said property surplus is just one of the effects of China’s One Child Policy beginning to unravel. One must question: what will China’s future look like if nothing continues to be done about the declining birthrate? Will its economy be able to survive?
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This article was edited by Naba Syed and Natalia Gaitan.
