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June 13, 2024

China’s Population Drops for 2nd Year, Raising Economic Concerns

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Jan 18, 2024

China’s population declined for the second consecutive year in 2023, dropping by 850,000 to 1.41175 billion as births plunged to record lows, official data showed on January 17th.^[1][2][3][4] The continued population slide is raising concerns about China’s economic prospects and ability to support its aging population.^[5]

Key Facts About China’s Population Decline

  • China’s birth rate hit a record low of 6.77 births per 1,000 people in 2023, down from last year’s record low of 7.52 births per 1,000.^[6] Total births numbered just 9.56 million, compared to 10.62 million in 2022.
  • Deaths jumped by 550,000 to 13.26 million, after COVID curbs were lifted, resulting in 3.67 million more deaths than births.^[7]
  • This is only the second time since the Great Famine of 1959-1961 that China’s population has declined.^[8]
  • China’s population is now predicted to start shrinking in absolute terms earlier than expected, likely within the next couple years.^[9]
Year Births Deaths Natural Growth Total Population
2022 10.62 million 12.71 million -2.09 million 1,412.9 million
2023 9.56 million 13.26 million -3.7 million 1,411.75 million

Causes Behind the Decline

The continued population decline is being driven by a falling birth rate despite government efforts to encourage couples to have more children.

Several key factors are suppressing births:^[10]

  • High education levels and economic development: More women are delaying marriage and childbirth to pursue careers.
  • High housing costs: Young people struggle to afford homes suitable for raising kids.
  • Preference for small families: Ideal family size has shrunk to 2 children.
  • COVID pandemic: Lockdowns and economic uncertainty further deterred pregnancies.

Meanwhile, China’s population is rapidly aging – 17.8% are now aged 60 and over. COVID disruptions and lack of access to health services likely elevated deaths. Relaxing zero-COVID policies unleashed a spike in infections that disproportionately impacted the elderly.^[11]

Economic and Social Consequences

The population drop spells trouble for China’s economy and President Xi’s vision of prosperity.

A shrinking workforce will curb economic growth. Less household spending will make boosting consumption harder. Providing healthcare, pensions and aged-care for hundreds of millions of retirees will cripple state finances.^[12]

The shift could also trigger social tensions. A shrinking population risks creating a shortage of brides, as cultural preferences for boys resulted in far more male births.

Experts warn the population crisis will only deepen.

“The population is aging so rapidly that the two-children policy no longer makes any sense,” said Huang Wenzheng, a demography expert with Beijing-based Center for China and Globalization. “It just doesn’t solve the problem.”^[13]

To arrest the decline, China may need to completely dismantle its limits on births and remove obstacles to getting married and having children. Radical pension reforms and boosting immigration will also be required.

But with births still plunging despite existing pro-natal policies, reversing the population slide may be impossible without profound cultural and economic shifts.

What Happens Next?

The latest figures underline the catastrophic failure of China’s previous one-child policy, which was relaxed to a three-child policy in 2021.^[14]

With deaths outstripping births by over 3 million and little prospect of a rebound, China’s dwindling population will remain a grave concern for Beijing in the years ahead.

More older people will be supported by fewer workers, dragging on growth and government resources.^[15] Ever-shrinking domestic markets will force a greater reliance on global exports and innovation to drive the economy.

China will release more detailed population data in April/May, which will give greater clarity on trends among different age groups and regions. But the message is clear – demographic decline will shape all aspects of China’s economy and society for decades to come.

^[1] https://www.reuters.com/world/china/chinas-ageing-population-threatens-switch-new-economic-growth-model-2024-01-18/
^[2] https://www.nytimes.com/2024/01/16/business/china-birth-rate-2023.html
^[3] https://www.bloomberg.com/news/articles/2024-01-18/what-china-s-falling-population-means-for-the-country-s-future-and-economy
^[4] https://www.ft.com/content/b9a4afc3-dd60-4f82-a74d-0541e7650252
^[5] https://www.reuters.com/world/china/chinas-ageing-population-threatens-switch-new-economic-growth-model-2024-01-18/
^[6] https://www.nytimes.com/2024/01/16/business/china-birth-rate-2023.html
^[7] https://www.forbes.com/sites/siladityaray/2024/01/17/china-saw-nearly-700000-more-deaths-in-2023-after-zero-covid-ended/
^[8] https://www.reuters.com/world/china/chinas-ageing-population-threatens-switch-new-economic-growth-model-2024-01-18/
^[9] https://www.ft.com/content/b9a4afc3-dd60-4f82-a74d-0541e7650252
^[10] https://www.nytimes.com/2024/01/16/business/china-birth-rate-2023.html
^[11] https://www.forbes.com/sites/siladityaray/2024/01/17/china-saw-nearly-700000-more-deaths-in-2023-after-zero-covid-ended/
^[12] https://www.bloomberg.com/news/articles/2024-01-18/what-china-s-falling-population-means-for-the-country-s-future-and-economy
^[13] https://www.nytimes.com/2024/01/16/business/china-birth-rate-2023.html
^[14] https://www.nytimes.com/2024/01/16/business/china-birth-rate-2023.html
^[15] https://www.bloomberg.com/news/articles/2024-01-18/what-china-s-falling-population-means-for-the-country-s-future-and-economy

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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