China’s population decline will have repercussions around the world

Hong Kong (CNN) — China may be one step closer to losing its position as the world’s most populous country to India after its population shrank for the first time since the 1960s.

The country’s population fell to 1.411 million people in 2022, about 850,000 less than the previous year, the National Bureau of Statistics of China (NBS) announced on Tuesday during a briefing on annual data. .

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

This time around, the decline is due to a combination of factors: the far-reaching consequences 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 this trend could spell trouble for the rest of the world if it continues, as China, as the world’s second largest economy, plays a key role in global growth.

The population decline is likely to exacerbate China’s problems with an aging workforce and drag on its growth, compounding its woes as it struggles to recover from the pandemic.

Why is this happening?

The population decline is partly due to China’s one-child policy, which for more than 35 years limited couples to only one child. Women caught violating this policy were often subjected to forced abortions, heavy fines, and evictions.

The government removed the rule, alarmed by the decline in birth rates in recent years. In 2015 it allowed couples to have two children, and in 2021 it increased to three. But the policy change and other government efforts, such as offering financial incentives, have had little effect, for a number of reasons.

The high cost of living and education and skyrocketing house prices are major factors. Many people, especially in cities, face stagnant wages, fewer job opportunities, and grueling work schedules that make it difficult and expensive to raise one child, let alone three.

These problems are exacerbated by entrenched gender roles, which often place most of the domestic chores and childcare on women, who, more educated and financially independent than ever, are increasingly unwilling to bear this unequal burden. Women have also reported discrimination at work because of their marital status or maternity, and employers are often reluctant to pay them for maternity leave.

Some cities and provinces have started to introduce measures such as maternity leave and expanded childcare services. But many activists and women say it’s not enough.

And the frustrations have only grown during the pandemic, with a disenchanted young generation whose livelihoods and well-being have been derailed by China’s inflexible “zero covid” policy.

China posted its worst economic growth in half a century 0:54

What this means for China

The population decline is likely to exacerbate the demographic problems China already faces. The country’s population is already aging and its workforce shrinking, putting enormous pressure on the younger generation.

China’s elderly now account for nearly a fifth of its population, authorities said Tuesday. Some experts warn that the country could be heading down a path similar to that of Japan, which entered three decades of economic stagnation in the early 1990s that coincided with an aging population.

“The Chinese economy is entering a critical transition phase, it can no longer rely on abundant and cost-competitive labor to drive industrialization and growth,” said HSBC’s chief Asia economist Frederic Neumann.

“As the supply of workers begins to shrink, productivity growth will need to pick up to keep up with the breakneck pace of expansion in the economy.”

China’s economy is already struggling, expanding just 3% in 2022, one of the worst results in nearly half a century, thanks to months of covid shutdowns and a historic housing market slump.

The labor crunch could make the recovery even more difficult as China resumes foreign travel and abandons many of the strict restrictions it has maintained in recent years.

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

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

What does this mean for the world?

Given its role as the engine of the world economy, China’s problems could have implications for the rest of the world.

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

A slowdown in the Chinese economy would not only weigh on global growth, but could threaten China’s ambitions to overtake the United States as the world’s largest economy.

“China’s limited ability to react to this demographic change will likely cause slower growth over the next twenty to thirty years and affect its ability to compete on the world stage with the United States,” the Center for Strategic and International Studies said. based in the United States, in an article published on its website last August.

It also seems likely that China will lose its position as the world’s most populous nation this year to India, whose population and economy are booming.

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

However, while Yi said the Indian economy could one day surpass the US economy, it still has a ways to go. India is the world’s fifth-biggest economy, having surpassed the UK last year, and some experts have expressed concern that the country is not creating enough job opportunities to keep up with its workforce growth.

However, some researchers say that the news from China could have a silver lining.

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

Peter Kalmus, a NASA climate scientist, argued that population decline should not be seen “as a terrible thing,” pointing instead to “the exponential acceleration of global warming and loss of biodiversity.”

what is the government doing

The Chinese authorities have stepped up their efforts to encourage large families, including through an inter-agency plan released last year to strengthen maternity leave and offer tax breaks and other benefits to families.

China’s leader Xi Jinping vowed in October to “improve the strategy of population development” and ease economic pressure on families.

“We will establish a system of policies to boost the birth rate and reduce the costs of pregnancy and childbirth, parenting and schooling,” Xi said. “We will pursue a proactive national strategy in response to population aging, develop senior care programs and services, and offer better services to seniors living alone.”

Some places even offer cash incentives to encourage more births. A town in southern Guangdong province announced in 2021 that it would pay permanent residents with babies under two and a half years of age up to $510 a month, which could add up to more than $15,000 in total per child. Other places have offered housing subsidies to couples with multiple children.

But those efforts have yet to yield results, and many experts and residents say far more radical national reforms are needed. After breaking the news on Tuesday, a hashtag went viral on Weibo, the Chinese platform similar to Twitter: “To promote the birth rate, the concerns of young people must first be resolved.”

“Our salaries are so low, while the rent is so high and the financial pressure is so strong. My future husband will work overtime until 3am every day until the end of the year,” wrote a Weibo user. “My survival and my health are already problems, not to mention having children.”

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