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China’s unprecedented economic growth during the period of reform that began in the late 1970s has been accompanied by a dramatic demographic transition— namely, a rapid decline in the fertility rate. In the period 1978–2015, China realised a real growth rate of gross national income (GNI) of 9.6 per cent—the fastest speed anywhere in the world in that period. On the other hand, according to the United Nations (UN 2015), China’s total fertility rate (TFR) dropped from 2.5–3 in the late 1970s and early 1980s to a replacement level of 2 in the first half of the 1990s, and has remained constant at about 1.5 since the second half of the 1990s.

How has the Chinese economy capitalised on the demographic dividend during the reform period?