China, a nation known for its vast population, is facing unprecedented demographic challenges. For the second consecutive year, the National Bureau of Statistics reports a decline in population, a phenomenon not observed since the great famine of 1959-1961. The implications of this decline, rooted in declining birth rates and an aging population, are far-reaching and have significant economic and social consequences.
Understanding the Demographic Shifts
In 2023, China experienced just 9.02 million births, merely half of the figure recorded in 2017. Contrastingly, the death toll rose to 11.1 million in 2023, marking an increase of 500,000 from the previous year. This resulted in a net population decline of 2.08 million in 2023, following a reduction of 850,000 in 2022. The cumulative loss of approximately 3 million people over two years is a cause for concern, signaling a trend that has not been witnessed since the mid-20th century.
Rising Death Rates Amidst Declining Births
A critical factor contributing to the population decline is the rising death rate, driven by both an aging population and the upsurge of COVID-19 cases in the early months of 2023. The aging demographic is primarily a consequence of the falling birth rate, with China’s total fertility rate plummeting from 1.66 between 1991 and 2017 to approximately 1.08 in 2022. This is significantly below the generally acknowledged replacement level of 2.1 births per woman needed to maintain a stable population.
To put this in perspective, while Australia and the United States maintain fertility rates of 1.6, China’s rate is now hovering around 1, with South Korea boasting the world’s lowest rate at 0.72 in 2023.
Declining Birth Rates Despite Implementation of Three-Child Policy
Despite the shift from the one-child policy to a three-child policy in 2021, births in China continue to fall. This decline is attributed to ingrained societal norms, the reduction in the number of women of child-bearing age due to past policies, and economic pressures that make parenthood less appealing. The introduction of a three-child policy, accompanied by tax incentives and other encouragements, has not been sufficient to reverse this trend.
China’s National Bureau of Statistics reveals that employees work an average of 49 hours per week, with economic pressures leading to women graduates earning less than their male counterparts. The pursuit of career ambitions, coupled with financial concerns, is contributing to delayed parenthood.
Hope Springs with the Year of the Dragon
Looking ahead, there is optimism that the Year of the Dragon in 2024, according to Chinese astrology, may bring a surge in births. Families may have consciously chosen to postpone childbirth during the less auspicious Year of the Rabbit in 2023. Such cultural and astrological considerations could influence birth patterns, offering a ray of hope amidst the demographic challenges.
Aging Population: Increased Dependency Ahead
Research from the Shanghai Academy of Social Sciences and the Centre for Policy Studies at Australia’s Victoria University paints a more concerning picture. Projections indicate a more substantial decline in China’s population, from the present 1.4 billion to approximately 525 million by 2100. The working-age population is expected to plummet to just 210 million by the same year, a mere one-fifth of its peak in 2014.
This demographic shift will lead to an older and more dependent population. By 2100, it is projected that every 100 Chinese of traditional working age will need to support 137 elderly Chinese, up from just 21 at present. This accelerated aging will have profound economic implications, challenging the capacity of the working-age population to support the elderly.
Challenges of Low Fertility
The challenges posed by China’s declining fertility rates are not unique to the nation. Observations of total fertility rates in neighboring regions, including Japan, Singapore, Taiwan, Hong Kong, and South Korea, reveal a similar downward trend. These trends align with the concept of the “low-fertility trap,” where efforts to boost fertility rates prove challenging once they fall below a certain threshold, often around 1.5 or 1.4.
China’s accelerated decline in population also accelerates the projected peak of the world’s population, bringing forward the forecasted peak by one year to 2083. The implications of this demographic shift extend beyond China’s borders, influencing global economic dynamics.
Conclusion: Economic Challenges and Uncertain Future
In conclusion, China’s demographic shifts, marked by declining births and an aging population, present formidable economic challenges. As the world’s second-largest economy, these shifts will reverberate globally, impacting consumer spending, wages, and government spending. The uncertainties surrounding the future fertility rate and the potential economic consequences make it imperative for policymakers to address these demographic challenges strategically. China’s journey into uncharted demographic territory calls for adaptive measures to ensure sustainable economic growth and a balanced society.