China’s population declined for the first time in sixty years, a turning point that came sooner than some expected amid a demographic crisis that could change the trajectory of the world’s second-largest economy.
The country’s population stood at 1.41 billion at the end of 2022, a decrease of 850,000 compared to 2021, according to data released by China’s bureau of statistics on Tuesday. The last time deaths outnumbered births in China was during Mao Zedong’s disastrous Great Leap Forward campaign, which caused widespread famine and an estimated 30 million deaths between 1958 and 1961.
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The historic turn came at least eight years earlier than most had predicted, said Xiujian Peng, a senior research fellow at the Centre of Policy Studies at Australia’s University of Victoria. “It has alarmed a lot of people because the Chinese government did not prepare for this to happen so soon,” Peng told VICE World News.
Peng blamed China’s disruptive “zero COVID” policy for contributing to the rapid decline in birth rates during the pandemic. Would-be parents were deterred also by economic uncertainty and the loss of access to medical services, as seen in other parts of the world in the early days of the pandemic, Peng said.
This is bad news for China. A double whammy of a shrinking labor force and an aging population has slowed its economy, which in 2022 recorded its weakest growth since the 1970s.
The contraction did not come as a complete surprise, with China’s birth rates falling for years. And its fertility rate, estimated at 1.15 children per woman in 2021, was already far below the replacement rate of 2.1 required to ensure a stable population and lower than that of Japan, which has the world’s oldest society. Even before the decline in 2022, China was projected to cede its title as the world’s most populous country to India this year.
In 2022, the United Nations revised its predictions and suggested China’s population could shrink to below 800 million people by the end of the century, bleaker than its previous forecast of 1.06 billion in 2019.
Bert Hofman, director of the East Asian Institute at National University of Singapore, said the projected further decline could cost China as much as 1 percent point growth per year.
Coupled with a rapidly expanding elderly population, China’s declining workforce could put pressure on its pension and healthcare system and strain public finances. Studies have shown that the main state pension fund could run dry by 2035.
China has sought to address these demographic challenges. In a major reversal of its “one-child policy” in 2021, the Chinese government allowed couples to have up to three children. It has also been considering raising the retirement age gradually.
In August, the National Health Commission unveiled a slew of perks to encourage families to give birth.
Local authorities across the country have also come up with their own initiatives. The southern manufacturing hub of Shenzhen, for example, offers a cash payment to parents of up to 19,000 yuan ($2,825) for newborns, while other cities have extended parental leaves and doled out tax subsidies for parents.
China’s leading demographers, including Cai Fang, former deputy director of the Chinese Academy of Social Sciences and a government advisor, have suggested further urbanization to replenish the labor pool and boost consumption.
But it remains to be seen how effective these measures are, given the complex nature of demographic changes.
“The society will not immediately feel the consequences,” Peng said. “But from the experience of European countries, as well as Asian countries like Japan, Singapore, and South Korea, it is not an easy task to bring back the fertility rate.”
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