Having children is the most sincere expectation of every couple after getting married. However, the latest reports show that the problem of low birth rate in Taiwan, China has become an irreversible trend, and was once rated as the region with the lowest fertility rate in the world. Among women who have children, the number of elderly women has begun to increase, and the number of children born with assisted reproductive methods has reached a record high.
The reasons for the sluggish birth rate in Taiwan, China are complex, including the delay in the age of childbearing for women. Mainland China has also begun to show signs of delay in the age of childbearing for women. Will the population and fertility situation replicate the path of low birth rate in Taiwan, China? With the increasing number of elderly mothers and infertility and , how will China's assisted reproductive industry develop?
Taiwan, China: The birth rate is severe and the growth rate is severe
There is a term in economics called "negative population growth", which means that the number of births in the local area is less than the number of deaths, causing the natural population growth rate to be negative at this stage.
According to statistics from the internal affairs department of Taiwan, Taiwan, China, it officially entered a stage of negative population growth in 2020. At the same time, the fertility rate in Taiwan, China is also showing a cliff-like decline.
Chart 1: Taiwan fertility rate in Taiwan
Data source: United Nations Ministry of Economic and Social Affairs "World Population Prospects in 2019", compiled by Gelonghui
From an average of 6.72 babies per mother to only 1.15 babies now, what reflects policy changes and social changes.
With the migration of a large number of people from other provinces, from 1946 to 1951, the average annual population growth rate of Taiwan, China exceeded 5%, and brought about the baby boom in the 1950s.
However, the ultra-high population growth has put the local area under severe population pressure. In 1964, the Taiwan Health Department of Health established a family health committee to fully implement the birth control policy. The public opinion slogans range from "to have children three years after marriage, no more than three children at most" to "two children are just right, boys and girls are as good as they are", and they are implemented in a flexible manner such as reproductive services and policy preferences.
With the advancement of birth control policies and rapid economic development, Taiwan's fertility rate in China dropped from a high of nearly 6 in the 1960s to 4 in 1970, and after 1985, it entered the era of fertility rate 1.
The fertility rate that has declined too quickly has aroused reflection from local society. In 1990, the Taiwan authorities in China revised the "Population Policy Program" and proposed that "two children are happy and three children are more lively", and formally abandoned the birth control policy and began to encourage childbirth, and put it into consideration for various childbirth assistance policies.
However, the introduction of policies to encourage birth control did not prevent the further decline in fertility rates in Taiwan, China. From 1.81 in 1990 to 1.77 in 1997, it took a sharp turn for the worse. After falling to 1.18 in 2004, Taiwan's fertility rate has been hovering at an ultra-low level below 1.2.
cliff-like birth rate, delayed childbearing age
population has shown a decrease in birth, not only in Taiwan, China, but also in mainland China in recent years.
In Since the founding of New China , there have been two large-scale rapid population growth in mainland China. However, with the implementation of the "less and eugenic" policy and the one-child policy, the number of births has continued to decline.
After the implementation of the "two-child policy in 2016, the number of births that year rose to 17.86 million, and in 2017 and 2018, it dropped to 17.23 million and 15.23 million respectively, and in 2019, it decreased by 580,000 to 14.85 million. The effect of the policy in 2019 continued to fade. According to the data of the seventh national population census, the number of births in my country was 12 million in 2020. Although the "three-child policy" is implemented in 2021 to encourage childbirth, under the high cost of living and high social pressure, according to Zeping's macro data, under the forecast, the number of births in China will fall below 10 million in the next 2-3 years.
Chart 2: China's birth population (10,000 people)
Data source: National Bureau of Statistics, Zeping Macro, Gelonghui compiled
If it is replaced with fertility rate, it may be clearer and clearer.
According to the statistics of UN Ministry of Economic and Social Affairs "World Population Prospects in 2019", the average number of people born in each mother in her life has gradually dropped from the early 6 births to the 3 births in the 1970s, and in the next generation of births, the level of 1.6 births. The 2020 Qipeng data shows that the total fertility rate of women of childbearing age in my country is 1.3. This value is not only far below the global average of 2.5, but even lower than Japan, which is known for its low birth rate aging. In other words, in the current situation, each mother has a one- or two-child birth to become the choice of most people.
Figure 3: Total fertility rate in mainland China
Data source: "World Population Prospects in 2019" by the United Nations Ministry of Economic and Social Affairs, compiled by Gelonghui
The cliff-like decline in population is not only related to the mother's "fewer and eugenic" of the mother, but also closely related to the age group in which the mother is born.
In Taiwan, China, the age of giving birth to mothers has been delayed in recent years. According to the statistics of the "2019 World Population Prospects" of the United Nations Ministry of Economic and Social Affairs, according to the calculation of the birth population according to the age classification of mothers, Taiwan, China, basically had mothers aged 20 to 29 in the first half of the last century, but since the 21st century, the number of mothers over 30 years old has gradually increased, and after 2010, they became the main force of childbirth mothers at the age of 30 to 34.
Figure 4: Taiwan, China, number of births is classified by mother age
Data source: "World Population Prospects in 2019" by the United Nations Ministry of Economic and Social Affairs, compiled by Glomenghui
In mainland China, there are also signs of women's reproductive age moving backwards. According to statistics from the "2019 World Population Prospects" of the United Nations Ministry of Economic and Social Affairs, calculated by mother age classification, before 2010, it became the mainstream option for women in mainland China to have children between 20 and 24 years old. However, with the influence of social pressure and other factors in recent years, the number of women aged 25 to 29 years old began to exceed the age group of 20 to 24 years old, and the number of people aged 30 to 34 years old has also begun to increase.
Figure 5: Mainland China classifies the number of births (thousands of people) according to mother age
Data source: United Nations Ministry of Economic and Social Affairs "World Population Prospects in 2019", Gelonghui compiled
Parenting Hope : assisted reproduction long-term dividend
Whether in mainland China or Taiwan, the fertility rate declines sharply, which is related to the decrease in the number of women giving birth and the regression of childbirth age. The direct problem of fertility at an advanced age is the increase in infertility rate, which has also caused many families to choose assisted reproduction to achieve fertility.
In June 2020, the National Health Administration of the Ministry of Health and Welfare of Taiwan Province released the "2018 Artificial Reproductive Implementation Results Analysis Report". We can see why Taiwan, China, hit a new high in the number of assisted reproductive treatment cycles while the fertility rate is declining.
In the decade from 1998 to 2018, the age of women who perform artificial reproduction in Taiwan Province was significantly delayed, and the proportion of elderly women increased. In 1998, the highest proportion of women who performed artificial reproduction in Taiwan was 32 years old, accounting for more than 8%. In 2018, the highest-profile women moved to 35 years old, and the proportion of women over 35 years old increased significantly compared with 1998.
Figure 6: Distribution of age percentage of females in artificial reproductive in Taiwan from 1998 to 2018
Data source: National Health Department of the Ministry of Health and Welfare of Taiwan Province, compiled by Gelonghui
At the same time, with the continuous maturity of artificial reproductive technology, in the past decade, the overall number of treatment cycles in Taiwan Province has increased rapidly. Although it was affected during SARS in 2003, the number of treatment cycles decreased. However, as the black swan event disappears, more and more consumers choose to freeze whole embryos, and the treatment cycle has risen exponentially, with the number of treatment cycles reaching 39,840 in 2018.
Figure 7: Number of artificial reproductive treatment cycles, live birth cycles and live births in Taiwan from 1998 to 2018
Data source: National Health Department of the Ministry of Health and Welfare of Taiwan, compiled by Gelonghui
Why did the number of assisted reproductive treatment cycles in Taiwan repeatedly hit new highs? The main reasons include the following three points:
(1) Taiwan, China has entered an elderly society in recent years, and the number of women who are suitable for marriage has decreased, resulting in a decrease in the overall birth base.
(2) Social pressure increases, because the cost of living increases, the pressure on women in the workplace increases, and after the childbearing age is delayed, it is relatively difficult to produce naturally, so other methods are chosen to increase production.
(3) medical coverage, IVF technology is mature, and the success rate is high. Taiwan's overall medical level ranks among the best in Asia, and can be synchronized with advanced European and American countries. Its success rate in the third-generation IVF is as high as 75-85%, ranking second in the world after the United States. (Data from ICMART).
If the number of assisted reproductive cycles and population trends are superimposed, it can be seen that the two show a reverse correlation. Taking Japan, which is a typical example of aging and leukogenic birth, as an example, with the development of IVF technology (such as Taiwan, China) and the frequent occurrence of assisted reproductive measures (such as Japan), the number of assisted reproductive cycles has shown explosive growth in recent years.
Chart 8: Number of assisted reproductive cycles and population trends in Taiwan, China
Data source: Ministry of Health and Welfare, Taiwan compiled
Chart 9: Number of assisted reproductive cycles and population trends in Japan
Data source: World Bank, Ethics Committee of the Japanese Society of Obstetrics and Gynecology, compiled
In contrast, in terms of time, the population changes in mainland China have many similarities with Taiwan, but in terms of time, it is later than Taiwan. Judging from the fertility rate below the replacement level and reaching an ultra-low level below 1.3, the decline in the fertility rate in mainland China is about seven or eight years later than Taiwan, and the relaxation of the birth policy is delayed longer, and the speed of birth reduction in mainland China may be faster than Taiwan.
From the perspective of industry development, the number of elderly women in Taiwan is gradually increasing. In recent years, assisted reproductive women account for the highest proportion of the age of 35 years old. In contrast, according to data from the National Bureau of Statistics, the population aged 31-40 has increased by 14.2% year-on-year compared with in the previous five years. The base of the main force of the target population of assisted reproductive population has increased, and the outbreak period of the assisted reproductive industry is about to come.
From the demand side, compared with Taiwan's assisted reproduction in China, the demand for assisted reproduction in mainland China is high, but the market penetration rate of needs to be improved. According to Anxin Securities data statistics, the ideal consumption of IVF in mainland China will reach more than 2.77 million per year. Based on the average cyclical price of 35,000, the market space will be close to 100 billion.
Assisted reproductive industry in the post-epidemic era: the strong will always be strong
For the assisted reproductive industry, there are very few hospitals in the mainland with licenses and excellent skills, which has also created a situation where the industry is in a state of ice and fire under the influence of the new crown epidemic.
On the one hand, for leading companies, they have not been affected much. Through remote medical treatment and other methods, some companies have even become more popular. private hospitals in some developed regions have become the main provider of local mid-to-high-end fertility services with high-level technology and services.
On the other hand, small enterprises in the industry with weak strength and weak brand power have been impacted, their living space has been squeezed, and even bankruptcy has occurred. For the entire industry of assisted reproduction, this epidemic will effectively increase the industry concentration and will be more conducive to the active development of the industry.
So, what are the characteristics of leading companies in assisted reproduction?
1. Operational capability: Brand effect strong
Chinese patients are more willing to receive treatment in medical institutions that hire famous doctors. In addition, due to concerns about team structure and operation, China has quite few doctors experienced in this field and is often hesitant to work for private assisted reproductive service providers.Cultivating professional and experienced experts to establish an influential medical team in China requires a lot of time and resources to develop an effective operational model to ensure success.
Take the listed Jinxin Reproduction as an example. According to Frost & Sullivan and the company's announcement data, the success rate of Jinxin Reproduction and the number of IVF treatment cycles have steadily increased, and are far higher than the industry average. According to the latest statistics, the company completed 27,354 IVF cycles in 2021, and its success rate also remained in the industry leading position. Among them, the success rate of headquarters hospitals (Chengdu Xinan Hospital and Jinjiang Reproductive Center, Shenzhen Central Urology Hospital ) was 54.5%.
2. Profitability: cash flow strong
A company has good cash flow, and it may not necessarily add much icing on the cake, but it can definitely provide timely help. The amount of cash flow can be said to be extremely critical.
For the assisted reproductive industry, taking Jinxin Reproductive as an example. Judging from the profit status in the latest income statement, Jinxin Reproductive's various profit indicators performed well. According to the latest data, the company's assisted reproductive medical services achieved 1.839 billion yuan (YOY: +28.9%) in 2021, of which 881 million yuan (YOY: +20%) in Chengdu, and in Shenzhen and Greater Bay Area achieved revenue of 427 million yuan (YOY: 42%). The cash amount at the end of the period at 2021 was 1.928 billion yuan.
3. Expansion ability: strong territory expansion, business radius enlargement
The reason why the concentration in the assisted reproductive industry has not been particularly high is that the regionalization is relatively obvious. Behind the obvious regionalization, it mainly comes from whether the system with the same standard can be replicated after expansion. If it can be expanded with the same standards, then regional barriers can be broken through.
has developed from an assisted reproductive center to the present, and the radius of Jinxin's reproductive business has continued to expand. In 2021 alone, through obtaining an IVF license and acquisition, the company added 4 new IVF licenses, involving Yunnan, China, Hong Kong, California, the United States and other places. In addition, the company has been promoted from a single assisted reproductive business to providing integrated full-fertility life services for pregnancy preparation, pregnancy, prenatal examination, delivery and postpartum. The value of a single service is constantly increasing, and the future development trend will have stronger momentum.
summary
In the title page of Jinxin Reproductive Prospectus, "The first step in life is to work hard to move forward." However, under the influence of various factors such as social pressure, the first step in having children has become increasingly difficult.
Women get married and have children continue to move backward, which also creates a rigid need for assisted reproductive treatment. Compared with Taiwan, which shows explosive growth in assisted reproduction, the penetration rate in mainland China is expected to increase.
Judging from the reference data given by Taiwan in the past, after the impact of SARS, there is still a strong need for treatment, the recovery speed is relatively fast, and the exponential growth is shown. In other words, in the post-epidemic era, the assisted reproductive industry is expected to recover further and the market capacity may reach 100 billion.
In contrast, for leading companies in China, Jinxin Reproduction has enough cash flow to keep warm. Extended expansion is accelerating the integration of industry concentration, presenting a pattern of strong people always being strong, which is worth paying attention and expectation.
