A nurse takes care of a newborn baby at a hospital in Fuyang, in China's eastern Anhui province, on Jan. 17.STR/AFP/Getty Images
China’s population shrank in 2022 for the first time since the Mao-era famine, pointing to a demographic crisis that will dominate the agenda of the country’s leaders in coming years.
Last year was the sixth-straight annual decline of birth rates, and the first time deaths outnumbered births in the country since the 1960s, according to statistics released Tuesday.
The beleaguered Chinese economy is starting to emerge from its zero-COVID induced fugue, but a demographic crisis could hamper future growth, potentially even preventing China overtaking the United States as the world’s largest economy.
China's annual birth rate
Births per 1,000 people
40
30
20
2022: 6.77
10
0
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
China's annual birth rate
Births per 1,000 people
40
30
20
2022: 6.77
10
0
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
China's annual birth rate
Births per 1,000 people
40
30
20
2022: 6.77
10
0
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
The last time deaths outnumbered births was when China saw widespread famine brought on by Mao Zedong’s Great Leap Forward, an effort to radically reform the country’s then-still-agrarian economy.
After that disaster, the Chinese population exploded, with birth rates of over 20 per 1,000 people throughout much of the 1970s. Fears of overpopulation led to the adoption of rules – often brutally enforced – limiting most families to a single child.
Population decline
Annual change in population (in millions)
20
10
0
Population fell by roughly 850,000 in 2022, the steepest decline since 1961.
-10
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
Population decline
Annual change in population (in millions)
20
10
0
Population fell by roughly 850,000 in 2022, the steepest decline since 1961.
-10
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
Population decline
Annual change in population (in millions)
Population fell by roughly 850,000 in 2022, the steepest decline since 1961.
20
10
0
-10
1950
1960
1970
1980
1990
2000
2010
2020
SOURCE: REUTERS
These remained in force until 2015, when they began to be relaxed, eventually replaced by encouragements to have more children. But the legacy of the “one-child policy” continues today, having produced an unbalanced, rapidly-aging population and shrinking work force.
“The long-held question has been will China avoid a situation where it gets old before it gets rich? And I think right now the answer is likely no,” said Nick Marro, Hong Kong-based global trade lead for the Economist Intelligence Unit.
No country has successfully reversed birth-rate decline, which tends to track with development, as wealthier, urbanized populations choose to have less children. China’s efforts include measures such as making it harder to divorce or get an abortion.
China recorded 6.77 births per 1,000 people in 2022, the lowest rate since records began in 1949, according to data released by the National Bureau of Statistics. In total, there were 9.56 million babies born last year, an almost 10-per-cent drop from 2021.
This was not enough to offset the 10.41 million deaths in 2022, leading to an overall population drop of around 850,000.
“China’s demographic and economic outlook is much bleaker than expected,” demographer Yi Fuxian said Tuesday, adding this will have repercussions for “social, economic, defence and foreign policies.” Mr. Yi said China’s shrinking labour force and downturn in manufacturing heft would further exacerbate high prices and high inflation in the United States and Europe.
“Smaller talent pools mean higher costs,” said Mr. Marro, adding that countries which rely on Chinese demand will also be affected by the shrinking population.
Nevertheless, “China still has a lot of things going for it,” he said. “The sheer size of the Chinese economy, its competitive position in global value chains, those are things which are probably going to persist for quite some time, regardless of demographic trends.”
Domestically, fewer people entering the work force will mean a drop in consumers, harming efforts to reorient China’s economy away from overreliance on exports. Mr. Marro noted that the economic figures released Tuesday showed growth was still driven by investment and production, while the retail consumer side was “really, really weak.”
The costs of caring for elderly relatives will have an outsized effect on many families given the “one-child policy” resulted in some working-age couples supporting as many as 12 people (two sets of parents and four sets of grandparents) as well as any children they might choose to have.
Even for those without multiple elders to support, the high costs of child care, particularly in urban areas, has led most couples to have only one or two children, despite recent pro-natalist efforts by the national and local governments, such as cash handouts for new parents.
Countries such as Canada and the U.S. deal with low birth rates through immigration, keeping the working-age population relatively static. For China to follow suit would be a dramatic, nigh-unimaginable policy shift, especially after recent years have seen a rise in Han-supremacist-tinged nationalism. China’s neighbours Japan and South Korea, both of which have long-faced similar demographic issues, have not relaxed immigration controls in response, instead looking for technological fixes to caring for an aged population.
China's projected working age population
Millions of people in the 18-to-60 age group
900
800
2023: 880.2 million
700
2040: 766.6
600
500
2024
2028
2032
2036
2040
SOURCE: REUTERS
China's projected working age population
Millions of people in the 18-to-60 age group
900
800
2023: 880.2 million
700
2040: 766.6
600
500
2024
2028
2032
2036
2040
SOURCE: REUTERS
China's projected working age population
Millions of people in the 18-to-60 age group
900
800
2023: 880.2 million
700
2040: 766.6
600
500
2024
2026
2028
2030
2032
2034
2036
2038
2040
SOURCE: REUTERS
Working age people – those aged 16 to 59 – made up 62 per cent of China’s total population last year, down half a percentage point on 2021. Meanwhile, the number of over-65s grew from 14.2 per cent to almost 15 per cent, according to the latest statistics. By 2035, this figure is expected to grow to more than a quarter of the population.
Within the next two years, the government will begin “gradually” delaying the age at which people retire, which currently stands at 60 for men and between 50 and 55 for women. This will be combined with improvements to social security and pension systems, and a drive to build more elderly care homes and “boost the development of the silver economy,” the State Council said last month.
At the other end of the scale, young people are struggling with high-unemployment rates, an issue exacerbated by stringent COVID-19 controls that were finally lifted last month, and one that undergirded protests that rocked many Chinese cities in November.
Largely as a result of zero-COVID, China’s economy expanded just 3 per cent last year, the second-lowest rate since the 1970s and short of an official target of “around 5.5 per cent.”
It remains to be seen whether Mr. Xi, and his soon-to-be-installed premier, Li Qiang, can thread the needle when it comes to responding to the demographic challenge.
Making all this harder is that Beijing must manage this shift at a time when it is facing increasing pressure from the West and a growing move toward decoupling from the U.S., China’s biggest economic partner, in response to Mr. Xi’s aggressive foreign policy.
A lot of the challenges facing China, Mr. Marro said, “are the result of poor policy choices.”
“They maybe made sense when they were first introduced,” he added. “But it took too long, especially when you’re talking about the demographic issue, for officials to realize that these policies needed to be adjusted.”
With reports from Reuters and Alexandra Li