Will China'S Demographic Dividend Affect Capital Market During The "12Th Five-Year" Period?

Cai Fang, director of the Institute of population and labor economics of the Chinese Academy of Social Sciences, said in an interview with reporters 11 that the disappearance of the demographic dividend will not affect the capital market, because "the population is a slow variable and the capital market is changing rapidly".

Earlier, Cai wrote that the demographic dividend would lead to adequate supply of labour and high savings rates, while China's demographic dividend would disappear in 2013.

Pan Xiangdong, chief economist of Everbright Securities, said in a telephone interview with reporters that the disappearance of the demographic dividend had no direct impact on the capital market, but he did not agree that the demographic dividend would disappear in 2013.

He believes that after 2013 or 2015, the ratio of elderly dependency in China has been rising slowly, while the child dependency ratio has declined.

However, it is not clear that the demographic dividend will disappear in this process, and it can only be said to have reached the turning point of Lewis. Therefore, the argument that savings rate will fall above the expectation of demographic dividend will not be established.

Economic growth is more driven by science and technology, and China's economic growth will not be greatly affected by aging.

Cheng Manjiang, chief economist of Bank of China, also disagrees with the argument that the demographic dividend will directly affect the capital market.

She told reporters that there is no doubt that the most vigorous period of China's demographic dividend has passed. In the future, as the overall population structure changes, population superiority will certainly not be the leading factor in the whole economic growth, but the disappearance of demographic dividend will be a gradual process.

The disappearance of demographic dividend may have a lagging effect on savings, because China's high savings rate is determined by many factors, and its correlation with population structure is weaker than that of other institutional factors.

Wei Fengchun, chief macroeconomic analyst at CITIC Securities, said that the disappearance of demographic dividends will not affect capital markets in the short term.

He believes that the impact of the disappearance of the demographic dividend has increased labor costs, savings rate decline, consumption decline, the elderly population increase.

But it will not have a direct impact on the capital market, because the demographic dividend will not disappear overnight, so it will have some impact on the capital market in three to five years.

He judged that the demographic dividend would not disappear until 2015.

Minority opinion: savings rate will lead to lower return on investment.

Unlike the above four experts, Tang Jianwei, senior macroeconomic analyst at the Ministry of communications development research, believes that with the decline of demographic dividend, the savings rate will decline, which will definitely affect the capital market.

After the aging of the population, the savings rate will decline, the capital leverage ratio will decrease, and the return on investment should also be lowered.

This will have an impact on the entire asset price, and will inevitably affect the stock market and real estate.

He also reckon that the demographic dividend will gradually disappear in 2015, but in reality, it is possible to extend the demographic dividend period by extending the retirement age or strengthening the training of the existing labor force, or allowing the demographic dividend to fade somewhat.

Shi Lei, a senior analyst at the China Banking and financial market headquarters, also believes that the disappearance of demographic dividends is bad for the capital market.

He believes that the disappearance of demographic dividend is a relatively slow adjustment, which will last for about 5 years.

As the aging population intensifies, the savings rate will decline. The future will mainly affect the real estate and stock market, because the cost of capital will rise and the interest rate will rise after the savings rate falls.

East Asian economies such as Korea and Taiwan have seen a sharp fall in the real estate market when demographic dividends begin to turn.

However, if there is good old-age security, the savings rate of residents may continue to rise after the disappearance of the demographic dividend, but the current savings rate in China is too high, but it will be unfavourable if it is pushed up again.

In August this year, the chief economist of China International Finance Corporation, Ha Jiming, proposed that "the birth of a large number of babies has been born in China in 1950~1960, resulting in an increasing proportion of the working age population and an inflection point until 2015."

The baby boomers' children entered the age of 20~30 in 2005. This demographic structure pushed up the demand for housing and consumption, and was supported by p generation income pfers, which led to the hot market phenomenon in recent years. "The demographic dividend will be further released in the future, and people with working ability will reach the peak by 2015."

He had repeatedly suggested that the disappearance of demographic dividends would lead to a decline in savings rates, asset prices and a slowdown in the economy.

He predicted that the inflection point of asset prices is likely to occur between 2010~2015.