China is recording its first population decline in 60 years

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Hong Kong
CNN

China’s population will increase in 2022 for the first time in more than 60 years, a new milestone in the country’s deep demographic crisis with major implications for its sluggish economy.

The population in 2022 will drop to 1.411 billion, down about 850,000 people from the previous year, China’s National Bureau of Statistics (NBS) announced at a briefing on Tuesday on annual data.

Analysts said the recession was the first since 1961 during the great famine that prompted former leader Mao Zedong’s Great Leap Forward.

“The population will probably decrease from here in the coming years. This is very important, with implications for potential growth and domestic demand,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

The birth rate also fell to a record low of 6.77 births per 1,000, down from 7.52 a year earlier and the lowest since the founding of Communist China in 1949. About 9.56 million babies were born, compared to 10.62 million in 2021 – despite a push from the government to encourage more married couples to have children.

The new data came alongside the announcement of one of China’s worst annual economic performances in nearly half a century, with the economy expanding just 3% for the year – well below the government’s target – the reinforce the steep economic challenges facing the country as its labour. a shrinking force and a growing retired demographic.

It also follows a UN prediction last year that India will overtake China to become the world’s most populous country in 2023.

China’s demographic crisis, which is expected to have a greater impact on growth in the coming years, has been a major concern for policymakers.

Beijing ended its decades-long and highly controversial “one-child” policy in 2015, after realizing the restriction had contributed to a rapidly growing population and a labor force that there was a decline that could greatly disturb the economic and social stability of the country.

To arrest the falling birth rate, the Chinese government announced in 2015 that it would allow married couples to have two children. But after a brief rise in 2016, the national birth rate has continued to fall.

Policymakers further relaxed birth limits in 2021, allowing three children, and ramped up efforts to encourage larger families, including through a multi-agency plan unveiled last year to leave strengthen maternity and offer tax breaks and other benefits to families. But these efforts have yet to see results amid changing gender norms, the high cost of living and education, and looming economic uncertainty.

Many young people are choosing to marry later or decide not to have children altogether, and decades of single births have led to the social phenomenon of the family with one adult child as the sole carer for two parent – pressing generation after the 1980s, are expected to both care for elderly parents and raise young children.

The pandemic years added to that pressure, as the tough response to Covid-19 and the Communist Party to the outbreak hit the economy and created political frustration, with some young people rallying around a phrase -catch “We are the last generation,” after Shanghai punishes two. – month lock.

Tackling demographic challenges remains a top political priority, with Chinese leader Xi Jinping pledging to “develop a population development strategy” and ease economic pressure on families in a keynote address at the start of the fifth Party Congress -Chinese year in October.

“[We will] establish a policy system to increase birth rates, and bring down the costs of pregnancy and childbirth, child rearing and schooling,” Xi said.

“We will pursue a proactive national strategy in response to population ageing, improve aged care programs and services, and provide better services for older people living alone.”

China’s elderly make up a fifth of its 1.4 billion people, with the number of people 60 and older expanding to 280 million – or 19.8% of the population – last year, officials said on Tuesday. That’s an increase of about 13 million people aged 60 and over from 2021.

The graying of China’s population follows a similar path playing out in the developed economies of Asia.

Japan and South Korea have also seen their birth rates fall and populations age and begin to decline along with their economic development, presenting challenges to their governments in to support a large aging demographic, while dealing with a shrinking workforce.

China’s working-age population peaked in 2014 and is expected to decline to less than a third of that peak by 2100, while the number of people aged 65 and over is expected to continue to climb huge, surpassing China’s working-age population by 2080, according to an analysis published by the World Economic Forum last year.

The latest national data shows the number of working-age adults continues to decline – by the end of 2022 it will make up 62% of the population, down 0.5% from the previous year, analysts say indicating that there are great challenges ahead.

“China’s economy is entering a critical transition phase, and it cannot rely on an abundant, cost-competitive workforce to drive business and growth,” said HSBC’s chief Asia economist, Frederic Neumann.

“As the labor supply begins to shrink, productivity growth must pick up to maintain the pace of economic expansion.”

Neumann said that while China’s economic growth would likely continue to outpace that of developed markets for years to come, it would likely slow “as increases in productivity cannot fully offset the drag from workers which is declining. ”

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