bad start to Xi’s third term

Nearly 850,000 inhabitants were lost; India is very close to overtaking China. In 2022 the national GDP grew only 3%, the second worst performance since 1976. With the aging of the population, the economic forecasts are not rosy. Beijing will also have to review its global action. To talk about recovery, the impact of Covid still remains to be assessed.

Beijing () – Xi Jinping’s third term in power has had a bad start: for the first time in more than 60 years the population has decreased, while in 2022 the economy grew by only 3%, the second worst performance since 1976.

According to the National Bureau of Statistics, China’s population fell by 850,000 people, down to 1.41 billion last year. And India is about to surpass it. It is the first time it has gone down since 1961, the last year of the “Great Famine.” The UN experts consider that the population of the Asian giant will drop 109 million by 2050.

The abandonment of the one-child policy in 2015 did not reverse the demographic trend, with grim consequences for the communist leadership. The decline implies an aging population and a consequent slowdown in the economy as the active labor force shrinks, unless productivity improves. Public finances will continue to worsen (Chinese debt is already high), with lower tax revenues and more health and social spending.

Kang Yi, president of the Bureau of Statistics, tried to placate the alarmism. His assessment is that there is no demographic problem, since the supply of work “still” exceeds the demand. However, You Jun, Vice Minister of Human Resources and Social Security, already raised the alarm in 2021, when he revealed that by 2025 the country would lose 35 million adults of working age.

Chinese analysts note that the demographic and economic situation will force the government to review its policies, including foreign affairs and defense. The forecasts of various US strategists are taking shape, according to which Washington must challenge the geopolitical rise of China in a long-term perspective, where time is not in favor of Beijing. Without a strong economic base, a country cannot be proactive internationally.

However, China’s adversaries should not claim victory. As demographer Yi Fuxian explained to Reuters, a contraction of industrial production in China due to lack of labor will drive up inflation in the rest of the world.

This year the world economy is at risk of entering a recession. Many are betting on the reopening of China, after three years of restrictions in the fight against Covid, to revive global growth. However, observers point out that the true impact of the current pandemic wave in the country remains to be assessed, for which there are still few data.