Economic Progress

Tick-tock? : Hong Kong is facing a 'demographic time-bomb'

Illuminated boats float on Hong Kong's Victoria Harbour during the opening ceremony of the East Asian Games December 5, 2009. The 5th East Asian Games will be held from December 5-13, with over 2,300 athletes competing in 22 different sports.      REUTERS/Bobby Yip      (CHINA SPORT CITYSCAPE) - RTXRHSV

Fertility rates in Hong Kong are some of the lowest in the world. Image: REUTERS/Bobby Yip

Chris Weller
Ideas Reporter, Business Insider
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While Japan grapples with a fertility crisis decades in the making, roughly 1,800 miles away another population is just starting to feel the squeeze.

Hong Kong is quickly becoming the next demographic time bomb.

Economists use "demographic time bomb" to refer to places where consumer spending and the national birth rate are both low. Often, they're entangled in a vicious cycle: As people feel the economy tightening, they have fewer kids, leading to even less money flowing into the economy, and so on.

In Hong Kong, the government is faced with a striking gender imbalance; women outnumber men at nearly every age bracket above 25.

The imbalance is mainly due to men seeking women up north, in mainland China, as the women there are commonly viewed as less choosy than in Hong Kong, according to experts in gender studies. Each year, the city also brings in thousands of foreign domestic helpers (who are almost always female) from countries like Indonesia and the Philippines. The two trends have coalesced into a tense climate for younger generations.

"I am very nervous. Finding a boyfriend in Hong Kong is extremely difficult, and there is a lot of pressure," 26-year-old Sarah Fung told Nikkei Asian Review.

As is typical with other demographic time bombs, Hong Kong's population is rapidly aging. The average life expectancies for men and women are the longest in the world: 87 years for women and 81 years for men. That means fewer people working, but more people relying on social services paid for by the young.

Meanwhile, fertility rates in Hong Kong are some of the lowest in the world. According to CIA data, the estimated birth rate is just 1.19 children per woman — far below the rate of 2.2 children that experts say countries must hit in order to keep populations steady.

The combination tends to make demographic time bombs worse. As seniors require more public funds, shrinking younger generations must bear ever-rising costs. These stressors make it even harder to start or grow a family, to say nothing of the baseline difficulties posed by the gender imbalance.

The challenge is so great that Paul Yip, a University of Hong Kong demographer, told the Wall Street Journal in 2012 that, according to his research, 20% of Hong Kong's female population born today should expect to remain single for the rest of their lives.

Hong Kong's government has tried to stem its crisis by bringing more women into the workforce, which research suggests helps fertility rates go back on the rise. Currently, 55% of Hong Kong women are in the labor force. The global average is 63%, according to OECD data.

In that respect, Hong Kong is poised to help itself out. There are 852 men for every 1,000 women, and there will likely be one million more women than men in the next 50 years. In other words, there is no shortage of women to enter the workforce.

What remains to be seen is whether Hong Kong embraces that untapped pool of labor or lets the demographic time bomb keep on ticking.

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