China’s population has witnessed a second consecutive year of decline in 2023, signaling significant challenges for the world’s second-largest economy. The National Bureau of Statistics reported a drop of 2.08 million people, or 0.15%, resulting in a total population of 1.409 billion. This decline surpassed the 2022 decrease of 8,50,000, marking the first population reduction since 1961.
The downturn is attributed to a record low birth rate and the aftermath of a COVID-19 wave following the relaxation of strict lockdowns in December 2022. Total deaths rose by 6.6% to 11.1 million, with the death rate reaching the highest level since 1974.
Record low birth rate
New births fell by 5.7% to 9.02 million, establishing a record low birth rate of 6.39 births per 1,000 people, down from 6.77 in 2022. The economic landscape further deterred family planning, with youth unemployment at record highs, white-collar wages falling, and a crisis in the property sector exacerbating concerns.
These demographic shifts raise worries about China’s economic growth potential, given the implications of a shrinking labor force and consumer base. Additionally, the rising costs of elderly care and retirement benefits strain local governments already burdened with debt.
Reasons behind the decline
China’s population aged 60 and over reached 296.97 million in 2023, constituting 21.1% of the total population, up from 280.04 million in 2022. The demographic challenges are anticipated to continue, with long-term projections by the United Nations estimating a further decline of 109 million by 2050, more than triple their previous forecast in 2019.
The historical context of China’s declining birth rate includes the one-child policy implemented from 1980 to 2015 and rapid urbanization during that period. Economic shifts, reminiscent of earlier booms in Japan and South Korea, saw large populations move from rural areas to cities, where the cost of raising children is higher.
As China faces these demographic challenges, global discussions intensify regarding the relocation of supply chains away from China. The United Nations estimates India surpassed China as the world’s most populous nation in 2022, fueling debates on the economic implications of such demographic shifts. These trends are likely to reshape China’s economic landscape and impact its global standing in the years to come.
(With inputs from Reuters)