China’s population declined for the first time in 60 years according to the National Bureau of Statistics of China. It is widely believed that the mishandled family planning measure is the prime reason for the decline. Read here to understand the global implications of the Chinese demographic change.
China’s population decreased from 1,412.6 million in 2021 to 1,411.8 million in 2022, according to the National Bureau of Statistics.
This is a historic occasion for a nation that will soon lose its title as the nation with the most people to India (according to UN estimates, India’s population will exceed 1,428.6 million in 2023).
The population decline in China and the population growth in India could have significant effects, particularly on the global economy.
China’s Population decline
China’s population last decreased in 1961, during the terrible four-year famine that followed Mao’s unsuccessful “Great Leap Forward” initiative.
But the most recent population fall is not a passing trend. The world’s most populous nation experiencing a population decline of up to 8,50,000 in 2022 will have a profound impact on both China and the rest of the world.
On January 17, Beijing reported that there were 10.41 million deaths and 9.56 million births in China in 2017.
- After unexpectedly abandoning its zero-tolerance policy against the covid in early December 2022, China experienced an increase in mortality connected to the covid.
- This year will probably see more Covid-related deaths than usual since infections are still spreading across the nation and because fatalities typically follow illnesses by a few weeks.
- The number of deaths this year may increase as a result of that outbreak.
Lessons can be learned from China’s demographic tale by nations that have attempted significant social engineering efforts.
- China has been attempting and failing for the better part of two decades to encourage families to increase birth rates, which have been falling since the government enacted a strict “one-child policy” in 1980.
- The late implementation of a “two-child policy” in 2016 to address the situation did not elicit the positive response that the planners had anticipated for a relaxation announced with fanfare.
- According to a government survey, 70% of respondents said they could not afford to have more children.
The demographic shift is already affecting China’s economy.
- 875 million people between the ages of 16 and 59 were in the labor force in 2022, down around 75 million from 2010.
- Labor-intensive jobs are leaving the country, primarily for Southeast Asia, as wages rise.
- Meanwhile, there were now 280 million people over the age of 60, a rise of 30 million.
- By 2050, there will be 487 million senior people or 35% of the population.
- According to China’s National Working Commission on Aging, by 2050, the GDP will be devoted to elderly health care at a rate of 26%.
- There are indications that China is already headed in the direction of Japan’s example of a protracted era of falling GDP and a dwindling workforce.
According to a study by the Research Institute of Economy, Trade, and Industry of Japan, the proportion of children and elderly people in China in 2020 was comparable to that in Japan in 1990.
- Furthermore, China arrived at this turning point earlier than Japan, whose fertility rate dropped from 1.75 to 1.29 in the preceding four decades whereas China’s decreased from 2.74 to 1.28.
- The study noted that India’s proportion of children and seniors in 2020 was comparable to China’s in 1980, right before that country’s economic growth began.
- That was only made feasible by utilizing its demographic dividend to the fullest by making significant investments in health care and education to create a workforce capable of running what would eventually become the world’s factory.
There are also societal repercussions-
- As the population ages, there will be fewer employees to pay for pensions and healthcare, which will result in a rise in demand for these services and put pressure on China’s social security system.
- Because many young people are already working to support their parents and two sets of grandparents, there will also be fewer people to care for the elderly.
Global impact of China’s population decline
China’s problems may affect the rest of the globe because of its importance as the engine of the global economy.
- The epidemic has demonstrated how China’s internal issues can impact the flow of trade and investment, as border controls and lockdowns hurt supply chains.
- A weakening Chinese economy could undermine China’s goal to surpass the US as the greatest economy, in addition to slowing down global growth.
- In the next twenty to thirty years, China’s limited capacity to respond to this demographic shift will probably result in slower growth results and have an impact on its capacity to compete with the United States on the global stage.
- China has assumed a central position in global supply chains, so anything that affects China will have knock-on effects on the world economy.
Such problems are not exclusive to China. The population is aging quickly in other East Asian nations as well, including South Korea and Japan.
A similar population decrease has long plagued numerous European countries, including Germany and Italy.
The situation in China, however, is unique. Its population is aging and declining yet it is still a middle-income nation, which makes financing socio-economic development more difficult.
Response of the Chinese government
Officials in China have increased their efforts to support larger families, notably through a multi-agency plan unveiled last year to expand maternity leave and provide tax discounts and other benefits to families.
They want to create a legislative framework that will increase fertility rates while lowering the price of childbearing, childrearing, and education.
They also intend to develop aged care programs and services, implement a proactive national policy in response to population aging, and improve services for elderly persons who are living alone.
The common people are asking for wider national reforms. Issues like low salaries and high rents increase the financial pressure on the earning member.
There have been many opinions that the population decrease is good as it would free up more resources needed to increase the standard of living and boost economic growth.
The world’s population expansion makes it difficult to end global hunger and poverty, as well as to slow down climate change, but China is not the only country that is concerned about its population loss and its age demographics, which are becoming more skewed.
Due to low birth rates and outward migration, the U.N. predicts that 61 nations or territories would see population declines of 1% or more between 2022 and 2050.
The World Health Organization predicts that by 2030, one in six persons would be 60 years old or older.
-Article written by Swathi Satish