What China's Population Decline Means for Its Economy

China’s long-anticipated demographic crisis has arrived earlier than expected. On Tuesday, the government posted negative population growth for the first time in 61 years.


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The birth rate is declining roughly a decade sooner than official predictions, adding to Beijing’s economic woes in the years to come. It also means the country is likely entering its final year as the world’s most populous nation.

China’s 1.41 billion people decreased by 850,000 in 2022 compared to a year earlier, according to its National Bureau of Statistics, which reported 9.56 million births vs. 10.41 million deaths last year as the population peaked.

The NBS figures represented the first fall in births since 1961, and the first time China had recorded fewer than 10 million new babies since 1950. That decade was marked by former Chinese leader Mao Zedong’s Great Leap Forward, an economic plan that heralded one of the worst famines in recorded history.

China conducts a nationwide census once a decade. In the intervening years, population samples are collected every November 1. The latest estimates, therefore, don’t account for the surge in COVID-related deaths since Beijing scrapped its strict zero-COVID policy in early December, Kang Yi, the NBS director, said at the press briefing in Beijing.

The Chinese population, which reached 1 billion in 1980, 17 years ahead of India, is now expected to be overtaken by its Asian neighbor in 2023, the U.N.’s World Population Prospects said last year. India’s population, also 1.41 billion in 2022, was only marginally smaller than China’s.

They had been expected to trade places by 2030, when the top five most populous nations are expected to be India, China, the United States, Indonesia, and Pakistan.

Rise of the ‘Super-Aged’

Over 65s in China numbered 280 million, or 14.9 percent of the population, according to the data. The country is hurtling toward what the United Nations calls a “super-aged society,” where those aged 65 or above account for at least 20 percent of the total, straining the pension and health care systems.

In an estimate released last September, Wang Haidong, a department head at China’s national health authority, said over the 60s were projected to reach 400 million people, or nearly one-third of the population, by 2035.

A sizable gap remains between China’s male and female populations—722.06 million vs. 689.69 million, the bureau said. The imbalance is a remnant of its one-child policy, which suppressed birth rates for decades before being scrapped in 2015.

Since May 2021, China has officially maintained a three-child policy, but incentives such as tax deductions, housing benefits, and cash handouts have done little to increase the desire to have children.

President Xi Jinping of China gestures after attending a meeting at the Asia-Pacific Economic Cooperation leaders summit on November 18, 2022, in Bangkok, Thailand. Xi has set humbler economic targets for his country's future amid China's demographic crisis. RUNGROJ YONGRIT/POOL/AFP via Getty Images

President Xi Jinping of China gestures after attending a meeting at the Asia-Pacific Economic Cooperation leaders summit on November 18, 2022, in Bangkok, Thailand. Xi has set humbler economic targets for his country’s future amid China’s demographic crisis. RUNGROJ YONGRIT/POOL/AFP via Getty Images

The ‘Middle-Income Trap’

The demographic crisis directly concerns long-term productivity levels. Its once-a-decade census, published last year, had already raised alarms about China’s shrinking workforce—those aged between 16 and 59—which declined further to 875 million people in 2022 from its peak of 997 million in 2014.

China has now fallen into the so-called “middle-income trap” of growing old before growing rich, and the trend is unlikely to be reversed. It’s the same fate experienced by many developed nations in the West, where healthier populations live longer, incomes rise and fertility rates fall.

In China, where nearly two-thirds of people live in urban areas, costs associated with child-rearing are often cited as a reason for not having children, a sentiment mirrored in South Korea, Japan, and Taiwan.

The Chinese economy is rebounding after Beijing’s enforcement of a zero-COVID policy depressed commercial activity last year as the government attempted to extinguish each and every outbreak. The virus is now ripping through society, but health experts believe the country has passed its first nationwide wave.

The NBS posted GDP growth of 3 percent for 2022, well short of China’s original target of 5.5 percent and less than half the 8.1 percent recorded in 2021. For a country used to decades of high economic growth, it was the second-lowest since the 1980s, after the pandemic-induced slump to 2.4 percent in 2020 is considered.

The long-ruling Communist Party, whose leader Xi Jinping had planned to double China’s wealth by 2035, must now contend with an economy that may ultimately struggle to supplant the U.S. at the front of the pack.

After China’s president articulated humbler ambitions last fall, experts told Newsweek that the country’s economic model would transition from a focus on explosive output to higher-profit technology sectors.

Beijing has walked back a number of industrial policies, including loosening control over the country’s tech industry, to boost confidence in the economy since 2022. However, amid ongoing uncertainty about the trajectory of China’s COVID-19 outbreak, the World Bank this month slashed its growth forecast for China to 4.3 percent from 5.2 percent.

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