China has entered a period of “negative population growth”, an important moment in the history of the country. As recently as 2019, the UN projected the population would peak in 2031-32, but despite major government efforts to reverse the trend, China has now begun what is expected to be a long period of population decline.
The ongoing shift in demographics could have a profound effect on everything from how the economy operates to Xi Jinping’s legitimacy. The Guardian spoke to experts about the implications for everything from climate change to the Chinese Communist party.
“There has long been talk of the need for economic restructuring through a gradual shift towards higher value, cleaner, more advanced hi-tech and services sectors, away from dirtier, low cost, high volume, low value addition manufacturing jobs.
“This demographic trend further reinforces the idea that it is about the quality of economic growth not just quantity of brute output. The good news is that moving away from fossil fuel and pursuing what China termed ‘ecological civilisation’ would help China improve the quality of its economic growth thereby also raising the quality of life for its shrinking population.” Bernice Lee, Hoffmann distinguished fellow for sustainability and research director, futures, at Chatham House.
“To boost fertility rates, the government should take measures that mitigate the motherhood penalty, i.e, offering women with children benefits and protections in the workplace, so that they would not be afraid of being penalised at work because of marriage and childbirth.
“However, given China is not a robust welfare state and with the slowdown of the economy, these gender-equalising measures that require the state’s investment and the redistribution of resources to women may not be what the state prioritises.
“What has been happening is that, on the one hand, experts and policymakers are encouraging young people, especially women, to get [married] earlier and have more children – which does not seem to work (marriage and fertility rates have been progressively dropping despite what the experts have to say), and on the other hand, employers are discriminating against women as [they] are perceived to have more care burdens and are thus deemed as secondary workers.” Yige Dong, assistant professor in the department of global gender & sexuality studies, University at Buffalo, SUNY
China’s status as a global superpower
“The slowdown in Chinese economic growth is an interesting real world experiment in whether economically successful countries appear more threatening than ones that are struggling. Are external threat perceptions driven more by a country’s policies and actions or by its economic capabilities? And once foreigners conclude that China is a threat, will they be willing to adjust these conclusions if China no longer appears to be an economic powerhouse?”
“China’s population decline and ageing population … is a reminder of America’s great advantage in being open to talented, hardworking immigrants from around the world.” Susan Shirk, author of Overreach: How China Derailed its Peaceful Rise.
The global economy
“In the short term, a reopening Chinese economy should provide an important source of strength for the rest of the world economy this year at a time when major western economies are grappling with higher inflation and interest rates and the war in Ukraine.
“Beyond the next year or so however, the ability of the Chinese economy to be the engine of global growth that it has been in the past looks increasingly in question.” Roland Rajah, director of the Indo-Pacific Development Centre at the Lowy Institute
The Communist party
“An ageing population … will reduce China’s tax revenue and contributions to pensions, all of which will affect the extent in which the party-state can provide for its citizenry. The unspoken social contract between the party and its citizenry is the provision of increased standards of living without political liberalisation. Longitudinal research (until the pandemic) indicates that for the most part Chinese citizens are on the whole satisfied with the central government but this is somewhat predicated on its ability to deliver material goods.
“Whether the party-state can continue to do so given the demographic changes is now open to question.” Dr Jennifer Hsu, research fellow at the Lowy Institute
The Chinese economy
“For China, the speed at which the population is ageing whilst it transitions to a middle-income economy is one of the concerns … China will get old before it gets rich.
China’s working age-to-dependency ratio increased from 37% in 2010 to 45% in 2021, meaning that for every 100 people, 45 required support. Working age is defined as ages 15 to 64.
“This demographic trend can also be expressed in the worker-to-retiree ratio. In 2020, there was 3.74 working-age people per retiree, but this ratio is projected to decline to 1.68 by 2045. This will have huge implications for the economy in terms of stress on China’s health system and pension shortfalls, thus impacting areas of economic growth. Innovation … tends to be led by a younger workforce, not an ageing one.” Dr Jennifer Hsu, research fellow at the Lowy Institute.
“The key thing is the declining birthrate. This means China will have fewer workers in the future and that will reduce how big we expect China’s economy to ultimately be in the future, other things being equal.
“We already knew that China’s workforce has been shrinking since around the middle of last decade and that the fertility rate is well below that needed to maintain a stable population size. But the latest numbers show that the birthrate has continued to decline quite rapidly. So the picture on China’s demographic problems keeps getting worse.
“The ability of the Chinese economy to be the engine of global growth that it has been in the past looks increasingly in question.” Roland Rajah, director of the Indo-Pacific Development Centre at the Lowy Institute
“For Xi, this trend was noted in his report to the 20th National Congress of the Communist party of China in 2022: ‘We will improve the population development strategy, establish a policy system to boost birthrates, and bring down the costs of pregnancy and childbirth, child rearing, and schooling.’ But we have seen little … success with China’s move towards a two- and three-child policy.
“If the party is unable to deliver a better life for its citizenry this will challenge not only the party’s legitimacy but also that of Xi Jinping.” Dr Jennifer Hsu, research fellow at the Lowy Institute