Throughout much of recorded human history, China has boasted the largest population in the world – and until recently, by some margin.
As a scholar of Chinese demographics, I know that the figures released by Chinese government on Jan. 17, 2023, showing that for the first time in six decades, deaths in the previous year outnumbered births is no mere blip. While that previous year of shrinkage, 1961 – during the Great Leap Forward economic failure, in which an estimated 30 million people died of starvation – represented a deviation from the trend, 2022 is a pivot. It is the onset of what is likely to be a long-term decline. By the end of the century, the Chinese population is expected to shrink by 45%, according to the United Nations. And that is under the assumption that China maintains its current fertility rate of around 1.3 children per couple, which it may not.
This decline in numbers will spur a trend that already concerns demographers in China: a rapidly aging society. By 2040, around a quarter of the Chinese population is predicted to be over the age of 65.
In short, this is a seismic shift. It will have huge symbolic and substantive impacts on China in three main areas.
In the space of 40 years, China has largely completed a historic transformation from an agrarian economy to one based on manufacturing and the service industry. This has been accompanied by increases in the standard of living and income levels. But the Chinese government has long recognized that the country can no longer rely on the labor-intensive economic growth model of the past. Technological advances and competition from countries that can provide a cheaper workforce such as Vietnam and India have rendered this old model largely obsolete.
This historical turning point in China’s population trend serves as a further wake-up call to move the country’s model more quickly to a post-manufacturing, post-industrial economy – an aging, shrinking population does not fit the purposes of a labor-intensive economic model.
As to what it means for China’s economy, and that of the world, population decline and an aging society will certainly provide Beijing with short-term and long-term challenges. In short, it means there will be fewer workers able to feed the economy and spur further economic growth on one side of the ledger; on the other, a growing post-work population will need potentially costly support.
It is perhaps no coincidence then that 2022, as well as being a pivotal year for China in terms of demographics, also saw one of the worst economic performances the country has experienced since 1976, according to data released on Jan. 17.
READ ON BELOW…China’s shrinking population is a big deal – Gript