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China's baby bust could see its urban pet population outnumbering the number of toddlers by 2030, investment bank Goldman Sachs wrote in a July 28 report.
"We expect to see stronger momentum in pet ownership amid a relatively weaker birth rate outlook and higher incremental household pet penetration from the younger generation," Goldman Sachs said in its report.
According to Goldman Sachs' forecasts, China will have more than 70 million urban pets by 2030.
That is nearly double the 40 million children under the age of four that China is expected to have in the same year, the report said while citing data from the country's National Bureau of Statistics.
The rise in pet ownership, the bank said, could help push China's pet food market to $12 billion by 2030.
People having more pets than babies shouldn't be surprising considering how China is presently grappling with a demographic crisis.
In 2022, the world's second-most populous country revealed that its population shrunk for the first time since the early 1960s.
China's population shrank again in 2023, with the number of deaths exceeding the number of births by 2.08 million people.
The drop in births has even resulted in some Chinese hospitals deciding to shut down their obstetrics departments altogether.
According to the most recently available official data, the number of maternity hospitals in China went from 807 in 2020 to 793 in 2021.
"I am not very surprised to hear about Goldman Sachs' forecast," said Lin Zhang, a University of New Hampshire professor who studies entrepreneurship and the digital economy in China. "We could observe similar trends in early developed countries in Europe and East Asia."
Experts say that there's a practical reason why the Chinese are opting for pets instead of children.
Zhang from University of New Hampshire said that pets play an important cultural role as companions to unmarried and childless youths, and seniors whose children don't live with them.
"In general, I think China's going through a cultural transformation related to its rising living standards that people start to find cultural meaning in pets instead of treating them more as functional animals like in traditional agricultural society," Zhang added.
Zheng Mu, an assistant professor of sociology and anthropology at the National University of Singapore, said pets also allow younger Chinese people to fulfill their "needs of meaningful companionship and intimacy" without "long-term obligations such as the education of children."
Raising pets instead of children is also a subtle way to deviate from social norms.
"Because the obligations for children are more socially normative and constraining, and also more long term, but obligations for pets can be more individualistic," Zheng said.
The ticking demographic time bomb has become a top concern for Chinese policymakers, who have pulled out all stops to arrest the decline in births.
Besides axing its controversial one-child policy, China has sought to encourage childbearing by dangling cash gifts to newly married couples as well as subsidies for fertility treatments and childcare.
But the incentives don't seem to have changed the minds of Chinese women, who told Business Insider in February that they were turned off by the hefty financial costs of starting a family.
"Let's face it, having a child is like owning an investment with no guaranteed return for at least 18 years," said Chinese venture capital analyst Bihan Chen, 26, told BI.
Content creator Emily Huang, 29, told BI that the biggest thing on her mind right now is how she's going to fund her own retirement. Having children, she said, would make that goal even more distant.
"I wouldn't choose to spend a part of my income on children because it's expensive," Huang said. "I feel like with my current level of income, I can't retire comfortably anytime soon."
To be sure, China is not the only country that is expected to see a boost in pet-related expenditure.
In the US, more households have pets than children. According to a 2023 report by the National Association of Realtors (NAR), 40% of American households had children in 2022, down from 48% in 2002.
In contrast, pet ownership has increased, particularly since the COVID-19 pandemic. The NAR report states that 70% of American households owned a pet in 2022, up from 56% in 1988.
In March 2023, Bloomberg Intelligence published its Pet Economy Report, which forecasts that the global pet industry is expected to increase in size from $320 billion to $500 billion by 2030 as the worldwide pet population continues to grow.
According to the report's authors, the surge in spending isn't solely due to an increase in pets per se but also because pets are living longer.
"Increased pet nutrition is leading to longer pet lives around the world," Ann-Hunter van Kirk, a senior biopharmaceutical analyst at Bloomberg Intelligence, said in a statement about the report.
"With this comes an increased need for spending relating to expensive healthcare for aging pets, and we project that this spending on lasting health for pets will continue to swell over the next decade," she continued.
