Mint Explainer: What China’s shrinking population means for its global power

China’s National Bureau of Statistics revealed that China’s population will decline by nearly one million people in 2022. Last year, China saw 9.56 million births, a sharp decline from 10.62 million births in 2021. Also, there were 10.41 million deaths in the country.

Experts believe that China is now on an irreversible path of rapid aging and population decline. By 2035, one-third of the population will be over the age of 60. With the decline in population and the working-age labor force, there are serious consequences for China’s development prospects.

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China’s demographic problem has its roots in the Chinese government’s decision to institute a one-child policy in the 1980s. While this was aimed at reducing the country’s population burden, it also ensured that the birth rate fell below the 2.1 births per woman, which is necessary to ensure the fertility rate remains stable at the population level.

China’s vast pool of young, cheap labor proved an important asset during the country’s economic boom over the past three decades. However, as this generation of workers began to age, there were fewer young people to replace them in the workforce.

China’s population is expected to shrink to 109 million by 2050. Fewer young workers and an increase in older retirees will reduce the productive capacity of the economy and put considerable strain on social infrastructure as retirees need pensions and health care.

Beijing, well aware of the scale of the crisis, reversed its one-child policy in 2016. However, the rising cost of living and increasing participation of women in the workforce, among other factors, limited most young couples to having just one child.

Given China’s centrality in global supply chains, especially as a manufacturing power, this demographic crisis will have dire consequences. The decline in the country’s productive workforce will have ripples throughout the global economy.

Changes can also be seen in China’s foreign policy. A country that spends staggering sums on old age care and health despite declining tax revenues will find it difficult to spend large sums on its military ambitions on a global scale.

China’s population decline will also contribute to India overtaking China to become the world’s most populous country this year, according to UN estimates.

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