A science fiction disaster blockbuster that has recently swept across China is "2012", which shows a scene of disaster almost no one can escape from. However, for China, 2012 will not be the year of disaster, but rather likely to be the year when various asset bubbles reach their peak. 2012 may be the peak of comedies and the climax of joy. This judgment is supported by the inevitable results brought about by China's population structure.
The first round of population birth peak after the founding of New China occurred in 1954 with 22.32 million people, then gradually decreased, and in 1961 during the three years of natural disasters, the number of newborns was only 11.93 million, 10 million less than at the peak.
The economic growth brought by the first round of population birth peak appeared between 1978-1982 after the reform and opening up. Around 1985, the economic growth slightly slowed down.
The second round of population birth peak in our country occurred between 1962-1973. In 1962, there were 24.37 million births, reaching a peak of 29.19 million in 1963. But from 1964 to 1973, the annual number of births remained between 24 million to 27 million, which could be called China's "baby boom". During these 12 years, 314 million people were born in China, which could be described as an unprecedented population explosion.
The impact of these 300 million people on Chinese society is enormous. When they went to primary school, middle school, and university, it was also the stage when the Chinese economy gradually accelerated, but the overall foundation of society was still relatively weak.
The people born since 1962 started to enter the marriage and childbearing period from 1984, and the peak appeared in 1987. That year, China had 25.08 million births, 4 million less than the population peak 24 years ago. However, it was precisely the childbearing of the "baby boom" generation that caused the third round of population birth peak in China, with more than 21 million births each year from 1985 to 1993.
Thus, we know the three population birth peaks in the history of New China: 1954, 1963, and 1987.
Based on these three peak periods, let's take a look at the Chinese economy. Between 1987-1989, it was a period in China with rapid price increases and many social issues. Why? Because the people born around 1963 entered the marriage and childbearing period at this time. The marriage wave led to severe housing shortages, and the childbearing wave led to the scarcity of material supplies. Coupled with the widespread corruption during the social price transition period, the problems seemed particularly numerous. At this time, the people born between 1965-1972 were entering universities and high schools, and their thoughts were relatively active. Thus, it was inevitable to trigger some contradictions.
Between 1990-1991, the Chinese economy seemed to enter a frozen period, but the people from the baby boom continued to marry and have children on a large scale, and the demand for social material wealth entered a booming period. Therefore, under the opportunity provided by Deng Xiaoping's southern tour, from 1992 to 1994, the Chinese economy entered a frenzied growth phase. And precisely in 1994, it was the last year for the youth from the baby boom era to get married and have children. From 1994 to 2000, the Chinese economy began to decline, and during this period, the number of people getting married and having children decreased by about 7 million per year compared to before 1994.
Starting from 2001, the Chinese economy gradually re-accelerated. Why? Because the people born between 1962-1973 entered the age group of 28-39 years old. After they got married and had children, without the pressure of having more children, they gradually began to improve their lives, and the demand for buying houses and cars gradually increased. In other words, they are the most consumption-capable group in China, and they bring what is known as the "demographic dividend."
However, this round of their consumption wave will reach its peak when their children get married. The birth peak of their children was in 1987, and the marriage peak will appear between 2009-2012. That is to say, the main age range for marriage for these young people is between 22 to 25 years old. The average age for buying a house is 22 years old.
Therefore, why did the housing prices fall in 2008 and then grow so sharply in 2009? Because the 25 million children born in 1987 needed to buy houses around this time. They might not afford it, but they rely on their parents. They have almost no choice at this moment — as an economist said, it is the mother-in-law forcing them to buy a house.
If you look at the Chinese population curve chart, it is not difficult to find that the population buying houses reached a phase peak in 2009, and the peak will occur in 2010. It will continue to stay at a high level in 2011, and will start to decrease from the peak in 2012, reducing by more than 1 million people.
From this perspective, the peak of China's housing prices will occur in 2010, and they will not fall much in 2011. The decline will occur in 2012.
Moreover, this decline may not rebound for a long time because the number of people who need houses for marriage will decrease year by year. After 2017, the number of people needing to buy houses will decrease by 4 to 5 million compared to 2010. More importantly, the children of the 1987 baby peak people will no longer need new houses.
Through the above analysis, Yang Tao concludes that young people get married at 22 and have children at 24. Such a time structure causes the peak consumption moment of Chinese adults to be reflected when their children get married at 23 and have children at 25. That is to say, for adults, their consumption peak will occur at 47-49 years old. This conclusion coincides with the research of American scholars — the peak consumption age for Americans is 45-50, with the peak at 48.
However, when studying the Japanese situation, Yang Tao also found that the consumption peak for Japanese adults occurs around 40 years old, which roughly equals the time when their children go to university. It is estimated that Japanese young people are relatively more independent, and Japanese young people getting married probably do not bear the burden of buying a house.
What supports the above consumption habits of Chinese people is the development trajectory of the economy. Between 1990-1995, the total population aged 22 in China reached 150 million, averaging 25 million per year. By 1996, this population started to decrease to 21.63 million, 20.43 million in 1997, 17.98 million in 1998, and further reduced to 16.76 million in 2001. Now recalling, wasn't the previous low point of the Chinese real estate market exactly in 2001?
Subsequently, the reason why housing prices gradually rose was precisely because the 22-year-old age group quickly returned to 20 million and maintained this level for four years, reaching 21.45 million in 2007 and 23.2 million in 2008, leading to the skyrocketing of housing prices in these two years. Affected by the financial crisis, housing prices fell in the second half of 2008, and buyers observed for half a year, finding that the rigid demand in China was too strong, so housing prices turned upward again. In 2009, this population reached the highest point in this round, 24.51 million, setting a record high for housing prices. Then, in 2010, the population was 23.89 million, in 2011 23.41 million, and in 2012 23.19 million. Please ask, with the demand here, how can housing prices fall? In 2013, this population decreases to 21.99 million, and in 2014 to 20.64 million, so how can housing prices not fall?
Many people might wonder, why weren't houses very prosperous and the economy not very good starting from 1996, but the stock market rose so much? Yang Tao's research found that in 1996-1997, the largest age group was 33-34 years old, i.e., the first generation of the baby boom born in 1963 entered the investment peak period. Think about it, people born in 1963 got married at 22, had children at 24, and their children went to elementary school before the age of 30. At this time, their parents were healthy (their parents' age was less than 60), and their consumption reached its peak. Afterward, they entered the age of savings, their investment awareness awakened, and a large amount of funds entered the stock market, causing the stock market to develop vigorously.
That is to say, China's housing market is determined by 22-year-olds, and China's stock market is determined by people aged 33 and above.
As mentioned earlier, the first generation of the baby boom lasted from 1952 to 1973. In 2006, the population born in 1972 also entered the 33-year-old age group. By then, all people born between 1962 and 1973 entered the investment era. It was also from 2006 that the new round of great development of China's stock market began. Starting from this year, the population capable of investing in the stock market (aged 33 and above) reached 300 million! Therefore, the number of accounts opened in China reached 100 million, and it would only increase more and more. This is a basic pillar for the improvement of China's stock market.
It is worth noting that the trough of the previous baby boom appeared in 1979. That year, the number of new births in China was only 17.15 million. Calculating according to the mortality rate, by 2012, when this batch of people turns 33, there will be approximately 16.5 million people. This means that the new force of China's stock market will reach its lowest level in 2012 — this lowest level often indicates that the stock market cannot rise and may fall.
Therefore, the bubble in China's stock market may continue until around 2012 under the support of the real estate bubble, reaching its peak and then falling due to the lack of successors.
Of course, this decline may not last long because data show that starting from 2014, the newly added 33-year-old population will return to a level close to or exceeding 20 million and can continue until 2020. From then on, it will start a long-term downward trend.
It is worth noting that by 2022, the population born in 1962 will enter retirement age, and it is estimated that their investment intensity will begin to weaken when they reach the age of 50 in 2012. In terms of income structure, after entering the age of 50, their income becomes relatively stable, and the pace of growth slows down. The funds they can continuously invest in the stock market begin to decrease, but their consumption will gradually shift towards health products and luxury goods. Their investment intensity weakens, and their investment style tends to be conservative. Therefore, from 2012 to 2020, it will not be the best time for China's stock market investment. The volatility of the stock market will slow down, the investment style will become increasingly stable, and the risk preference degree of investors will also decrease.
Furthermore, starting from 2012, China's pharmaceutical industry and elderly service industry will enter a golden development period of 20 years. This is mainly due to the first generation of the baby boom entering the period of health product consumption. Moreover, the number of people over 60 years old will reach 180 million and continue to increase, reaching 240 million by 2020, accounting for more than 18% of the total population.
Similarly, 2012 will be a golden year for baby care products, after which it will decline. Because this year, the population born in 1987 will reach the final peak of childbearing. This year, nearly 10 million people in China will die of old age or accidents, and the number of newborns will drop to around 14 million. Thereafter, until 2020, the number of births per year will be around 10 million, while the number of deaths will exceed 10 million, marking the peak of China's population — as Yang Tao previously analyzed, the funeral industry will be the most certain growth industry in China for the next 30 years.
Therefore, for China, 2012 will be a turning point and the beginning of a new era. In this year, China's housing bubble will start to burst, the stock market bubble will also burst, baby services will start to decline, primary education and even higher education will face difficulties (the number of college students will reach its peak this year), and economic growth will start to weaken. However, through institutional reforms or policy adjustments, the Chinese will overcome short-term difficulties and become richer, and this trend will continue until 2017. By around 2017, China's modernization construction will basically reach its peak, railway and road investments will largely be completed, investment-driven growth will be unsustainable, causing China to fall into economic stagnation around 2020. A foreigner once said, "China will grow old before it grows rich," which, though biased, also points out problems in China's population structure. Solving population issues must start before 2012; otherwise, by 2050, China will experience a dark period in economic and social development — with fewer than 1.2 billion people in society and more than 500 million elderly people, how can society develop?
It is worth noting that foreign scholars have pointed out that America's economic recession will start in 2010 and continue until around 2023. Based on this, they concluded that the world will enter a deflationary period during this time. The basic basis is that America's demographic dividend will start to decline from 2010 and reach its lowest point in 2012.
This view somewhat has a flavor of being blinded by a single factor. Because for China, 2010 is the peak year for young people to get married, and also the golden period for the consumption of the baby boom generation in their forties. During this period, the consumer demand and investment demand from China may reverse the dire situation of the world economy.
Of course, foreign studies also point out that China will miss the new prosperity cycle starting in 2023, while India will rise. At least from the current perspective, this view makes sense.
Since this is the case, what should we prepare for in 2012?
(A note: The population data involved in this article are mainly derived from the results of Yang Tao's analysis based on the data released by the National Bureau of Statistics, which may have errors compared to the actual situation, but considering the differences in urban and rural population structures comprehensively, it does not affect the basic conclusions. The following figure was made by Fang Feng, a well-known demographer, reflecting the trend of China's population.)
Reposted by Yang Tao