What China's shrinking population means for its future

SINGAPORE: China’s population is shrinking sooner than expected, but the demographic shift – while a big issue psychologically – is unlikely to affect its economic growth in the short term, said observers on Tuesday (Jan 17).

China’s population fell last year for the first time in six decades, a historic turn that is likely to mark the start of a long period of decline in its citizen numbers.

The drop is the worst since 1961, and gives weight to predictions that India will overtake China this year to become the world’s most populous country.

LITTLE IMPACT IN THE SHORT TERM

“Psychologically, it’s a big issue. This is a pivotal moment,” said Dr Stuart Gietel-Basten, professor of social science at Khalifa University. 

“It’s really no surprise that we’ve moved into this era of population decline, because we’ve had low fertility in China for such a long period of time.”

But whether it becomes a demographic crisis or not depends on how the government responds to it, he added.

In the short term, there will not be much impact on various areas such as housing and education, according to observers. 

“It’s not going to make any difference. What will be the greater issue is going to be how the government can respond to this new demographic paradigm,” said Dr Gietel-Basten.

“Of course, this is no big surprise to the government. Maybe it’s happened a little sooner than we might have expected because of COVID which, in many parts of the world, pushed fertility rates to very low levels (due to) the economic uncertainty and jobs issues related to COVID.”

The longer-term impact will be determined by how Beijing works through this new demographic paradigm, he said, adding that it has to consider factors such as the productivity of the population and the number of older people relative to the younger ones supporting the economy. 

FALLING POPULATION MAY NOT BE DUE TO ONE-CHILD POLICY

China’s population fell by roughly 850,000 to 1.41 billion at the end of last year, according to the country’s National Bureau of Statistics. 

In the long-term, experts see China’s population shrinking by 109 million by 2050. 

Observers told CNA’s Asia Now that China’s strict one-child policy, imposed between 1980 and 2015, may not have caused the falling population.

The policy worked extremely well in shrinking the population growth rate, especially in the cities, said Dr John Donaldson, associate professor of political science at the Singapore Management University’s School of Social Sciences.

The country relaxed the one-child policy in 2016 to allow two children per couple. More recently in 2021, it allowed couples to have three children.

‘But the funny thing was that even after the relaxation, most urbanites were unwilling to have extra children because of issues (such as) housing and the cost of education. The cost of raising children is just very tight within the cities and very difficult,” said Dr Donaldson. 

“So the issue no longer is the one-child policy. That policy has been relaxed, but even after the relaxation, people are not having children.”

Dr Donaldson noted that it is a different story in the rural areas, where the one-child policy was not enforced as strongly and concerns such as getting a good education remain. 

“Because of the urban-rural gap, you’re having very few children in urban areas, and many underqualified children in rural areas, which creates a major problem, a major headache, a long-term demographic problem for China as it tries to improve its economy,” he said. 

INDIA TO OVERTAKE CHINA AS WORLD’S MOST POPULOUS NATION

Experts said China, which has more than 1.4 billion people, still faces population challenges such as stress on its infrastructure. 

“China is not about to run out of people. It’s still a huge population,” said Dr Donaldson. 

“The fear is that they’ve overcorrected, that they’re going to have too many elderly people, too few young people, which will have major effects on the economy and on China’s future.”

The country’s birth rate last year was just 6.77 births per 1,000 people, down from a rate of 7.52 births in 2021 and marking the lowest birth rate on record.

The death rate, the highest since 1974 during the Cultural Revolution, was 7.37 deaths per 1,000 people, compared to a rate of 7.18 deaths in 2021.

Dr Gietel-Basten pointed out that countries with an ageing population will face a strain on their healthcare and social welfare systems. There will be a need to keep the older population as healthy and as active as possible. 

Such countries also have to ensure that their smaller workforce is productive and reach their full potential, he added. 

“China has got to be able to do more with the younger population. It has to enable them to realise their full potential, to try and balance this new demographic system.”

On predictions that India will overtake China as the world’s most populous nation this year, Dr Gietel-Basten said: “Geopolitically, maybe China loses the bragging rights… But in terms of economic growth, this is much more than population size, and even population structure.”

A strong economy can be built through the development of decent jobs and education that caters to the needs of the labour market, among other things, he added. 

“If you put all of those things together, then obviously India is behind China on a number of those different metrics,” said Dr Gietel-Basten. “So it’s not over for China by any means.”