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China’s Marriage Slump and Its Shaky Housing Market Are Taking a Toll on the Economy

Ally Liu, 27, graduated from Beijing’s prestigious Peking University with bachelor’s and master’s degrees in finance, and now works at an investment firm. She said she’s exhausted from long hours at work.

“It’s embarrassing, but I’ll just say it,” she said in an interview from China’s capital. “I want to find a guy.” After a long pause, she added, “But it’s hard.”

China’s marriage rate steadily increased until hitting a peak in 2013, when 13.5 million marriages were recorded. By the end of that year, a precipitous decline began—one that continues. Last year the marriage rate hit half its 2013 level, at 6.8 million, according to China’s Ministry of Civil Affairs.

The factors complicating Liu’s romantic pursuits are manifold. Either she is drained of energy and pressed for time, or the potential suitor is. Her close relationship with her parents compels her to abide by one of their marriage demands: a spouse must own a home and ideally a car or other investments, or come from a rich family.

Both the causes and effects of the marriage falloff are being widely discussed in China. For one, the rising unemployment rate for the youth cohort has broken record after record each of the past few years.

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Joblessness for this group, aged 16 to 24, hit a record high of 21.3% in June. By comparison, the rate for the same age group in the U.S. was 7.5% in June, according to the U.S. Bureau of Labor Statistics.

But while China’s number frightens many who are on the cusp of graduation, it may in fact be much higher.

Last week, a professor at Peking University, wrote in a leading financial magazine that her calculations show the rate could be as high as 46.5%. The online article by Professor Zhang Dandan, which has since been deleted, argued that some 16 million non-students in this range are likely “lying flat”—a popular Chinese expression meaning to have given up efforts to work.

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This sky-high jobless rate has given companies that employ younger workers—most notoriously tech firms—extreme leverage over their employees. If one wants a job at all, he or she may be forced to work the “996” schedule—9 a.m. to 9 p.m., six days a week.

This leaves those who do choose the corporate life little time or energy for romantic pursuits. “No gym, no dates, no time for my own stuff,” said Lee Wang, a 30-year-old project manager at one of China’s leading gaming companies, which he asked not be named.

Amid these work conditions lies a vast property market that is both unstable and out of reach for an increasing number of Chinese. Many young men were caught up in the recent spate of defaults among China’s large developers, which left millions of already-purchased units unfinished, leaving the owners in limbo.

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A survey by university researchers taken just before the pandemic found that two-thirds of Chinese born after 1990 felt that owning a house was necessary for marriage.

The pressure for male suitors to own a property even has a phrase, the “mother-in-law economy”—meaning the requirement of the would-be bride’s mother that the future husband own a home.

A team of scholars from multiple Chinese business schools found that “the increasing price of houses, an important measure of marriage cost, has significantly reduced the marriage rate in China.”

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Using 20 years of data, they found that for every 1,000 yuan ($140) increase in property prices per square meter, the marriage rate falls by 0.3%. With housing prices in large Chinese cities rivaling those in the west, such price increases put significant dents in the marriage rate, according to the study.

“As housing prices continue to rise, many young people opt out of marriage because they cannot afford to buy a house,” said study author Zhou Hongyong.

So many Chinese have decided not to buy a home and remain unmarried that even if housing prices fall, the generational shift may have already cemented, a Chinese economist told local media in September.

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The government is in a difficult spot. It wants to boost the property market because rising prices means rising wealth for the hordes of Chinese who put their life savings in housing. But this would exacerbate the unattainability of purchasing property.

Ripples have also been felt in areas effected by the marriage rate, such as fertility. After a two-year lag, birthrates began to fall at roughly the same rate. China now faces a demographic crisis, with a shrinking population that will have too few workers to support a vast number of elderly citizens.

In 2001, China implemented legislation prohibiting unmarried women from any form of assisted reproductive technology (ART), including freezing one’s eggs. Women have pushed back against the law, by going overseas in droves to freeze their eggs and by challenging the legality of the legislation.

Last year, a Beijing court threw out a lawsuit from a women who said a hospital had refused to freeze her eggs because she was single. But officials may have taken notice. Other women have since filed suit.

In March, the National Health Commission began formally seeking expert opinion on allowing egg-freezing and other ART procedures, a step usually taken before legislation is introduced.

While foreign—particularly American ART companies—have benefited from this Chinese influx, a relaxation in the policy in China would mean a boon for the nascent fertility industry.

Experts that Barron’s spoke to were skeptical that the government, or the private sector, could easily intervene, or had the willingness to do so, to reduce work hours and pressure in hopes of improving marriage and fertility rates.

Not only are private companies reluctant to shrink working hours or take other employee-friendly measures because of cutthroat industry competitiveness, but firms could impede government from doing so, said Eli Friedman, chair of International and Comparative Labor at Cornell University who specializes in China.

“If the government were to require fewer working hours without a reduction in wages—which would be necessary for people to still afford living expenses in large cities—you would see tremendous pushback from companies, as it would undermine a key tenet of their business model,” he told Barron’s.

Zhenchao Qian, professor of sociology at Brown University, said that long hours in the private sector aren’t the primary reason for low fertility rates. Those who work in government or state sectors don’t necessarily work long hours but still marry late and have fewer children, he pointed out.

“It probably has more to do with the cost of raising children and poor job prospects even when children go to top tiered universities, that discourage marriage and fertility,” he said.

The government right now views economic development as more urgent than addressing the marriage and fertility problem, experts said. But policy makers still need to engage but tread lightly. “As a more effective approach, the government can contribute by addressing cultural attitudes toward marriage and family, modifying laws and regulations to influence the costs and benefits of having children,” said Haizheng Li, professor of economics at the Georgia Institute of Technology.

Write to editors@barrons.com

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