China’s population is shrinking. The impact will be felt around the world

Hong Kong

China may be one step closer to losing its place as the world’s most populous country to India after its population declined for the first time since the 1960s.

China’s National Bureau of Statistics (NBS) announced during Tuesday’s annual data briefing that the country’s population will drop to 1.411 billion in 2022, down 850,000 from the previous year.

The last time China’s population fell was in 1961, during a famine that killed tens of millions across the country.

This time, a combination of factors is behind the decline: the far-reaching effects of the one-child policy that China introduced in the 1980s (but has since abandoned); changing attitudes toward marriage and family among Chinese youth; entrenched gender inequality and the challenges of raising children in China’s expensive cities.

Experts warn that if this trend continues, it could spell trouble for the rest of the world, with China playing a key role in driving global growth as the second largest economy.

A shrinking population is likely to exacerbate China’s problem with an aging workforce, slowing growth and adding to its woes as it struggles to recover from the pandemic.

The population decline is partly the result of China’s one-child policy, which has limited couples to having only one child for more than 35 years. Women caught defying this policy are often subjected to forced abortions, heavy fines, and eviction.

Concerned about the declining birth rate in recent years, the government canceled this rule. In 2015, it allowed couples to have two children, and in 2021, it increased the number to three. But policy changes and other government efforts, such as offering financial incentives, have had little impact for a variety of reasons.

High cost of living and education and rising property prices are the main factors. Many people, especially in urban areas, face stagnant wages, fewer job opportunities and grueling working hours that make raising a child both difficult and expensive.

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These issues are compounded by reinforced gender roles that often leave housework and childcare to women who are more educated and less financially independent than ever before, making them increasingly unwilling to take on this unequal burden. Women also reported being discriminated against at work based on their marital or parental status, and employers often refused to pay for maternity leave.

Some cities and counties have begun to introduce measures such as paternity leave and expanded child care services. But many activists and women say this is not enough.

And the frustration has only grown during the pandemic, with a disillusioned younger generation whose livelihoods and well-being have been disrupted by China’s uncompromising zero-Covid policy.

China's Three Child Policy ICU McLean pkg intl hnk vpx_00011727.png

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Population decline is likely to add to China’s demographic problems it already faces. The country’s population is already aging and its labor force is shrinking, putting a lot of pressure on the younger generation.

China’s elderly now make up about a fifth of its population, officials said Tuesday. Some experts warn that the country could take a similar path to Japan, which entered three decades of economic stagnation in the early 1990s, coinciding with its aging demographics.

“China’s economy is entering a critical phase of transition and can no longer rely on an abundant and competitive workforce to drive industrialization and growth,” said HSBC Asia economist Frederic Neumann.

“As the supply of workers begins to decline, productivity growth must pick up to maintain the high rate of economic expansion.”

China’s economy is already in trouble and is expected to grow by just 3% in 2022 – one of the worst performances in almost half a century, thanks to months of Covid lockdowns and a historic downturn in the property market.

A shrinking labor force could further complicate the recovery as China resumes outward travel and loosens many of the strict restrictions it has enforced over the past few years.

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There are also social implications. China’s social security system is likely to come under pressure as there will be fewer workers to fund things like pensions and health care as demand for these services increases due to a graying population.

There will also be fewer people caring for the elderly, as many young people are already working to support their parents and two sets of grandparents.

China's elderly population

China’s senior citizens risk being left behind

Given its role in driving the global economy, China’s challenges could have implications for the rest of the world.

The pandemic has shown how China’s internal problems can affect the flow of trade and investment, with shutdowns and border controls disrupting supply chains.

China’s sluggish economy is not only slowing global growth, but could threaten China’s ambitions to overtake the United States as the world’s largest economy.

“China’s limited ability to respond to these demographic changes will likely slow its growth performance over the next twenty to thirty years and affect its ability to compete on the global stage with the United States,” said the US-based Center for Strategic and International Studies. . said in an article on his website last August.

It seems that China will also lose its place as the world’s most populous country this year to India, whose population and economy are also growing.

“India is the biggest winner,” tweeted Yi Fuxiang, who studies Chinese demography at the University of Wisconsin-Madison.

However, while Yee said India’s economy could one day surpass that of the US, it still has a way to go. India is the world’s fifth-largest economy, overtaking Britain last year, and some experts have expressed concern that the country is not creating enough jobs to keep up with its growing workforce.

However, some researchers say there may be a silver lining to the Chinese news.

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“For both climate change and the environment, a smaller population is a boon, not a curse” tweeted Mary Gallagher, director of the University of Michigan International Institute.

Peter Kalmus, a climate scientist at NASA, argued that population decline should not be seen “as a scary thing” and instead pointed to “exponentially accelerating global warming and biodiversity loss.”

Chinese authorities have stepped up efforts to encourage larger families, including through a multi-pronged plan released last year to strengthen maternity leave and offer tax breaks and other benefits to families.

Chinese leader Xi Jinping made a promise in October, improving the population development strategy and easing the economic pressure on families.

“[We will] Establish a policy system to increase birth rates and reduce costs for pregnancy and childbirth, child rearing and education,” Xi said. “We will pursue a proactive national strategy in response to population aging, develop programs and services for the elderly and We will provide better services for the elderly who live alone.”

Some places even offer cash incentives to encourage more births. A village in the southern province of Guangdong announced in 2021 that it will pay permanent residents with children under the age of 2 and a half up to $510 a month, which could add up to more than $15,000 per child. Other places have offered real estate subsidies for couples with multiple children.

But these efforts have yet to bear fruit, and many experts and residents say more sweeping national reforms are needed. After the news was released on Tuesday, a hashtag spread on Weibo, China’s Twitter platform: “To encourage births, you must first address the concerns of young people.”

“Our salaries are very low, while the rent is very high and the financial pressure is very heavy. My future husband will be working until 3am every day until the end of the year,” wrote one Weibo user. “My life and health are already a problem, let alone have children.”


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