China, the world’s most populous country with around one-sixth of the world’s population, recorded a demographic decline last year for the first time in six decades.
According to demographers, this fall in population is likely to be sustained, perhaps until the end of the century, and is set to severely impact the Chinese economy and pension system. The UN has already forecast that India is likely to dethrone China as the country with the most inhabitants in 2023.
While the Chinese were once known for their large families, with their population doubling from 1960 to 1.4 billion today, the number of births in China have dropped dramatically.
In 2022, just 9.56 million births were recorded in mainland China, the National Bureau of Statistics (NBS) announced on Tuesday. At the same time, 10.41 million deaths have been recorded, resulting in a net drop of 850,000 people.
The last time the Chinese population dropped was in 1960-1961, when Chinese Chairman Mao’s “Great Leap Forward” policy started a famine, causing tens of millions of deaths.
Population decline
These declines have occurred in spite of China’s abandonment of one child policy in 2015. Chinese families can now have three children.
Nevertheless, Chinese citizens are increasingly opposed to having children due to the high costs of raising a child. Chinese women enjoy a higher level of education than in other countries, which means that many women now prioritise their work over having children.
Young people are also more averse to having children. Digital technology, workplace culture, and social pressure have made it increasingly difficult for young people to form lasting relationships in China. 55.6% of men and around 39% of women are single in China.
The fall in population is a significant reversal from UN estimates in 2019. Back then, it was believed that China would not reach its peak population until 2031-2032. Since then, the fertility rate has collapsed to 1.15 children per woman in 2021, far behind the generational renewal threshold of 2.1 children per woman. In Belgium, the fertility rate is 1.55 births per woman.
Economists already predict that the declining population will have a significant impact on the competitiveness of the Chinese economy. A declining labour force would mean higher labour costs and increased pension payments. It is feared that pensions payments could represent 20% of GDP in 2100, against just 4% in 2020.
Incentivising families
Regional Chinese authorities are desperate to increase birth rates in their local areas. Many local authorities are now offering incentives for families to have more children.
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In the southern Chinese city of Shenzhen, near the border with Hong Kong, authorities are offering birth bonuses and allowances, which are paid until a child is three-years-old. A couple welcoming their first baby receives 3,000 yuan (€410). For the third child, this reward rises to 10,000 yuan (€1,370). In total, a family with three children would receive 37,500 yuan (5,150) in bonuses and allowances.
The eastern Chinese province of Shandong offers 158 days of maternity leave, seven weeks more than in Belgium. Other Chinese cities prevent speculation on housing to ensure the availability of affordable housing for families with two or three children.
It is hoped that, ultimately, these initiatives will reduce the cost of having children and lessen the demographic decline. If nothing is done, the Chinese population will decline by 1.1% each year. In a worst-case scenario, that would mean that by 2100, China would only have 587 million inhabitants, less than half what it has today.
