Which country could overtake China in population by 2023?
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Hong Kong (CNN)
China's population shrank in 2022 for the first time in more than 60 years, a new milestone in the country's deepening demographic crisis with significant implications for its economic slowdown.
The population fell in 2022 to 1.411 million, some 850,000 people less than the previous year, China's National Bureau of Statistics (NBS) announced during a briefing Tuesday on annual data.
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Analysts said the drop was the first since 1961, amid the great famine caused by Mao Zedong's Great Leap Forward.
“The population is likely to trend downward from here in the next few 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 7.2 a year earlier and the lowest level since the founding of communist China in 1949. Some 9.56 million were born babies, up from 10.62 million in 2021, despite a government push to encourage more married couples to have children.
The new data came alongside the announcement of one of China's worst annual economic results in nearly half a century, with the economy expanding by just 3% on the year, well below the government's target, underscoring the major economic challenges facing the country as its workforce shrinks and its retiree demographic grows.
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It also follows a UN prediction last year that India will overtake China to become the world's most populous country by 2023.
Shoppers at a market in Dali, Yunnan, on January 14.
(Liu Ranyang/China News Service/VCG/Getty Images)
Political solution?
China's demographic crisis, which is expected to have an increasing impact on growth in the coming years, has been a key concern for policymakers.
Beijing scrapped its decades-long and highly controversial “one child” policy in 2015, after realizing that the restriction had contributed to a rapidly aging population and shrinking workforce that could severely undermine economic stability. and society of the country.
To stop the falling birth rate, the Chinese government announced in 2015 that it would allow married couples to have two children.
But after a brief uptick in 2016, the national birth rate has continued to fall.
Lawmakers further relaxed limits on births in 2021, allowing three children, and increased efforts to encourage larger families, including through a multi-agency plan launched last year to strengthen maternity leave and offer deductions. tax and other benefits to families.
But those efforts have yet to see results amid shifting gender norms, the high cost of living and education, and looming economic uncertainty.
Many young people choose to marry later or decide not to have children, while decades of single births have led to the widely discussed social phenomenon of families with an adult child as the sole caretaker for two parents: squeezing the post-1980s generation out of the who are expected to care for their elderly parents and raise their young children.
The pandemic years added to that stress, as Covid-19 and the Communist Party's strict response to the outbreak battered the economy and led to deep political frustration, with some young people rallying around the slogan "We are the last generation." , following Shanghai's two-month punitive confinement.
Addressing demographic challenges remains a top political priority, with Chinese leader Xi Jinping pledging to "improve population development strategy" and ease economic pressure on families during a key speech at the start of the Communist Party's Quinquennial Congress. from China in October.
"[We will establish] a system of policies to increase birth rates and reduce the costs of pregnancy and childbirth, parenting and schooling," Xi said.
“We will pursue a proactive national strategy in response to population ageing, develop senior care programs and services, and provide better services to seniors living alone.”
economic slowdown
China's elderly make up a fifth of its 1.4 billion people, and the number of people aged 60 and over expanded to 280 million, or 19.8% of the population, last year, officials said Tuesday.
That's an increase of about 13 million people age 60 and older since 2021.
The aging of China's population follows a similar trajectory in the developed economies of Asia.
Japan and South Korea have also seen their birth rates plummet and their populations age and begin to shrink along with their economic development, posing challenges for their governments in supporting a large demographic of older people, while facing a shrinking workforce.
China's working-age population peaked in 2014 and is projected to decline to less than a third of that peak by 2100, while the number of people aged 65 and over is projected to continue to rise sharply , outnumbering China's working-age population by about 2,080, according to an analysis published by the World Economic Forum last year.
The latest national data shows that the number of working-age adults continued to decline: by the end of 2022 they represented 62% of the population, down 0.5% from the previous year, and analysts point to big challenges ahead. .
"The Chinese economy is entering a critical phase of transition, it can no longer rely on abundant and cost-competitive labor to drive industrialization and growth," said Frederic Neumann, chief Asia economist at HSBC.
“As the supply of workers begins to shrink, productivity growth will need to pick up to sustain the breakneck pace of expansion in the economy.”
Neumann added that while China's economic growth would likely outpace that of developed markets in the coming years, it would likely slow "as productivity gains cannot fully offset the drag of a shrinking labor force." .
CNN's Laura He and Juliana Liu contributed reporting.
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