Hong Kong CNN —
China may be one step closer to losing its place as the world’s most populous country to India after its population shrank for the first time since the 1960s.
The country’s population fell in 2022 to 1.411 billion, about 850,000 fewer than the previous year, China’s National Bureau of Statistics (NBS) said during a Tuesday briefing on annual data.
The last time China’s population declined was in 1961, during a famine that killed tens of millions of people across the country.
This time, a combination of factors is behind the decline: the far-reaching effects of the one-child policy introduced by China in the 1980s (but since abandoned); changing attitudes toward marriage and family among Chinese youth; entrenched gender inequality and the challenges of raising children in China’s expensive cities.
Experts warn that if it continues, the trend could spell trouble for the rest of the world, with China playing a key role in driving global growth as its second-largest economy.
A shrinking population is likely to worsen China’s problems with an aging workforce and slow growth, adding to its woes as it struggles to recover from the pandemic.
The population decline is partly the result of China’s one-child policy, which for more than 35 years limited couples to having just one child. Women caught defying the policy were often subject to forced abortions, heavy fines and banishment.
Alarmed by falling birth rates in recent years, the government lifted the rule. In 2015, it allowed couples to have two children, and in 2021 it increased that to three. But the policy shift and other government efforts, such as offering financial incentives, have had little effect — for a variety of reasons.
The high cost of living and education and skyrocketing property prices are major factors. Many people – especially in cities – face stagnant wages, fewer job opportunities and grueling work hours that make raising one child, let alone three, both difficult and expensive.
These problems are exacerbated by entrenched gender roles that often place the bulk of housework and childcare on women—who, more educated and financially independent than ever before, are increasingly unwilling to shoulder this uneven burden. Women also report facing workplace discrimination based on their marital or parental status, with employers often reluctant to pay for maternity leave.
Some cities and provinces have begun to introduce measures such as paternity leave and expanded childcare services. But many activists and women say this is far from enough.
And disillusionment has only grown during the pandemic, with a disillusioned younger generation whose livelihoods and well-being have been thwarted by China’s uncompromising zero-Covid policy.
Hear how parents in China are reacting to the new three-child policy
A shrinking population is likely to add to the demographic problems China already faces. The country’s population is already aging and the labor force is shrinking, putting enormous pressure on the younger generation.
China’s elderly now make up nearly a fifth of the population, officials said Tuesday. Some experts warn that the country could follow a similar path to Japan, which entered three decades of economic stagnation in the early 1990s, coinciding with an aging demographic.
“The Chinese economy is entering a critical phase of transition, no longer able to rely on an abundant, competitive workforce to drive industrialization and growth,” said HSBC’s chief Asia economist Frederick Neumann.
“As the supply of workers begins to shrink, productivity growth will need to accelerate to maintain the rapid pace of economic expansion.”
China’s economy is already struggling, expanding by just 3% in 2022 – one of the worst performances in almost half a century, thanks to months of Covid lockdowns and a historic slump in the property market.
A shrinking labor force could make the recovery even more challenging as China resumes outward travel and abandons many of the tight restrictions it maintained over the past few years.
There are also social implications. China’s social security system is likely to come under strain as there will be fewer workers to fund things like pensions and health care – as demand for these services increases due to a graying population.
There will also be fewer people to care for the elderly, with many young people already working to support their parents and two sets of grandparents.
China’s senior citizens risk being left behind
Given its role in driving the global economy, China’s challenges could have ramifications for the rest of the world.
The pandemic illustrates how China’s domestic problems can affect the flow of trade and investment, with its blockades and border controls disrupting supply chains.
A slowing Chinese economy will not only hold back global growth, but could threaten China’s ambitions to overtake the United States as the world’s largest economy.
“China’s limited ability to respond to this demographic shift is likely to result in slower growth outcomes over the next twenty to thirty years and affect its ability to compete on the world stage with the United States,” the US-based Center for Strategic and international studies said in an article on its website last August.
China also looks likely to lose its spot as the world’s most populous nation this year to India, whose population and economy are booming.
“India is the biggest winner,” tweeted Yi Fuxian, who studies Chinese demography at the University of Wisconsin-Madison.
However, while Yi said India’s economy could one day surpass America’s, it still has a long way to go. India is the world’s fifth-largest economy after overtaking the UK last year, and some experts have expressed concern that the country is not creating enough jobs to keep up with its growing workforce.
Still, some researchers say the news from China may have a silver lining.
“For both climate change and the environment, smaller populations are a boon, not a curse,” tweeted Mary Gallagher, director of the International Institute at the University of Michigan.
Peter Kalmus, a NASA climate scientist, argued that population decline should not be seen as a “terrible thing”, pointing instead to “exponentially accelerating global warming and biodiversity loss”.
Chinese authorities have stepped up efforts to encourage larger families, including through a multi-agency plan released last year to strengthen maternity leave and offer tax breaks and other benefits to families.
Chinese leader Xi Jinping pledged in October to “improve population development strategy” and ease economic pressure on families.
“[We will] establish a political system to increase the birth rate and reduce the costs of pregnancy and childbirth, child rearing and schooling,” Xi said. “We will pursue a proactive national strategy in response to an aging population, develop aged care programs and services and provide better services for older people living alone.”
Some places even offer cash incentives to encourage more births. A village in the southern province of Guangdong announced in 2021 that it would pay permanent residents with babies under 2 1/2 years old up to $510 a month — which could add up to a total of more than $15,000 per child. Other places offer real estate subsidies for couples with many children.
But those efforts have yet to yield results, with many experts and residents saying much more sweeping national reforms are needed. After Tuesday’s news broke, a hashtag went viral on Weibo, China’s Twitter-like platform: “To promote birth, you must first address the concerns of young people.”
“Our wages are so low while the rent is so high and the financial pressure is so great. My future husband will be working overtime until 3am every day for the rest of the year,” wrote one Weibo user. “My survival and health are already issues, let alone having children.”
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