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February 10 marks the beginning of the Year of the Dragon in the lunar calendar. It’s the start of a year likely to be a turning point for China’s structural reform.
Per the lunar zodiac, each year is also associated with one of five elements, and 2024 is the Year of the Wood Dragon. Incidentally, 2024 also heralds the beginning of the fire era under the 20-year, five-element cycle.
Conventionally, the Year of the Dragon is a preferred period for Chinese families to have children. From an economic perspective, this has interesting implications given China’s ongoing demographic challenges.
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Indeed, in the last two years of the Dragon, 2000 and 2012, the number of newborns in Chinese hospitals – so called ‘dragon babies’ - were higher than other years.
Could we see the dragon-baby effect help with demographic challenges in 2024? The economic reality in China today makes it unlikely. China’s economic growth is expected to continue to slow and market volatility continue. These factors are likely to affect the family planning of Chinese households.
Of course, the demographic challenge is not necessarily the only factor affecting Chinese economic development. But as long as China is willing to invest in human capital, China’s population will continue to enjoy a healthy life and the prosperity of China’s economy.
Raymond Yeung is Chief Economist, Greater China at ANZ
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