2021-06-15-瑞士信贷集团-人口普查发布后的重温_中国人口变化的定位_48页_1mb

China Market Strategy: Demographic Changes and Investment Implications

Core Content Overview

China's recent population census highlights significant demographic shifts, including a rapidly ageing population and a declining birth rate. Despite being the world's most populous country, China's total fertility rate (TFR) has dropped to 1.3, lower than Japan and South Korea. These changes are expected to bring about structural transformations across various sectors, creating both opportunities and challenges for investors.

Main Themes and Implications

1. Ageing Population

• Positive Impacts:

  • Increased demand for healthcare services, including chronic disease management.
  • Rising awareness of wealth management and sophisticated capital markets.
  • Growth in senior care services and property management.
  • Potential for automation in manufacturing due to labour shortages.
  • E-commerce may benefit from an increasing number of senior netizens with purchasing power.

• Negative Impacts:

  • Increased pension liabilities and public expenditure pressures.
  • Cap on property growth, with only top-tier cities seeing inflow.
  • Challenges for early education and K12 sectors due to low birth rates.

2. Low Birth Rate

• Positive Impacts:

  • Growth in fertility-related services.

• Negative Impacts:

  • Decline in demand for early education and baby care products/services.

3. Urbanisation and Education

• Urbanisation rate increased to 63.9% in 2020, with continued migration to the eastern regions.
• The working-age population is becoming more educated, with an increase in the number of people with university education.
• Improved education levels may support a new demographic dividend in the long run.

4. Structural Changes in the Economy

• Expect a broad range of structural changes in the medium-to-long term.
• These include shifts in healthcare, education, insurance, property, and e-commerce sectors.

Key Sectors and Companies

Beneficiaries of the Demographic Shift

• Healthcare: CR Medical, Jinxin Fertility, JD Health, Ali Health
• Consumer: Anta, Proya Cosmetics
• E-commerce: PDD, CEG, TCOM, Tongcheng-Elong, CTG Duty Free
• Industrials: Estun, Inovance
• Banks: CMB, PAB
• Insurance: Ping An, China Pacific (H)
• Property: Longfor, CG Services
• Education: CEG, EDU
• Travel: TCOM, Tongcheng-Elong, CTG Duty Free

Companies Expected to Face Challenges

• Education: TAL, EDU, R&F

Policy Considerations

• The government has introduced a three-child policy, a further development from the 2013 one-child policy repeal.
• More supportive measures are needed to reverse the declining birth rate, including economic incentives and improved social policies.
• Policies to address pension liabilities and support elderly care are also crucial.

Conclusion

The demographic changes in China will have profound structural implications across various sectors. While the challenges of an ageing population and low birth rate are significant, they also present investment opportunities in healthcare, insurance, e-commerce, and automation. The success of the three-child policy will depend on additional supportive measures, and the market is expected to see a shift in demand and investment focus accordingly.