The region has pretty much the lowest fertility rate in the world. What gives?
We are supposed to be at the start of the Asian century although right now it increasingly looks like no one will be here to see it before it kicks into high gear.
That is because the wider region has four top five countries worldwide with the lowest fertility rates – anywhere.
No Replacement
According to a Visual Capitalist graphic released Wednesday sourced from Statista, Taiwan and South Korea place first and second with a fertility rate of 1.1, followed by Singapore, Hong Kong, and Macau in third, fifth, and sixth at a not much better 1.2.
This all falls well below the 2.1 replacement rate considered necessary for a sovereign nation to maintain population stability.
Africa Alone
Looking at the rest of the world, Europe is not much better, with eight countries in the top 20 while North America has five.
On the other side of the equation, we have India, which recently became the most populous nation in the world balanced out by Africa, which as a region, only has one entrant in the top 20 list of countries with low fertility rates.
Net Migration Crisis
This is all part of a theme that finews.asia has discussed extensively starting in 2023 when China’s population experienced its first decline since 1961.
It is now, however, becoming increasingly clear that the fertility crisis is also compounded by the fact that other statistics indicate that the regional net migration rate is higher than anywhere else worldwide. On top of that is the fact that many, if not most, have strict limits on most forms of immigration.
Double Whammy
Although we maintained previously that there was a dubious link between fertility and growth, some economists and forecasters may potentially have to change their tune given the double whammy most countries are experiencing.
Many of them, including South Korea, which is at the top of the dubious top 20 list, seemingly understand the seriousness of the situation and have started providing substantial monthly allowances for newborn children, even though these kinds of measures tend to have a limited, short-term impact at best.
Serious Implications
This all has long-term ramifications for the finance industry, including private banking and wealth management. For one, wealth is likely to consolidate within a smaller segment of the population, meaning that client populations and segments are likely to become increasingly static and it may not grow as fast as has been the case.
Moreover, if wealthy clients follow the general migration trend, it will also put additional stress on the compliance and control of cross-booked accounts in a way that will potentially incur significant additional costs - and risks.
