China’s demographic decline, a national and global challenge

China, the world’s most populous country, lost people last year for the first time in six decades. A historic turn that experts estimate will mark the beginning of a long period of decline in the number of citizens and will have profound economic and social implications, both for the Asian giant and for the entire world. The challenge thus adds to the long list of challenges faced by its president, Xi Jinping, who observes how internal problems have accumulated in recent months. It is no longer just a question of reactivating the economy of the second world power, but also of satisfying the needs of a population that in November and December overcame their fears and took to the streets to protest, and to persuade them that they should have more children to ensure the development of the country and its socio-economic cohesion. The future of the superpower is at stake.

The official Chinese press had already advanced in recent days the possibility of a reduction in the population due to a drop in the number of births in 2022, but no one expected such strong figures. According to the Chinese National Statistics Office, the number of inhabitants fell by 850,000 people, with which the Asian country closed last year with a population of 1,411.7 million, compared to 1,412.6 the previous year. A citizen contraction that has not been registered since 1961, when China lost seven million inhabitants due to the great famine caused by the failed industrialization campaign promoted by Mao under the name of the Great Leap Forward, which is estimated to have cost the lives of between 15 and 55 million Chinese between 1958 and 1961.

This demographic drop is not accidental. Chinese statistics confirm the seriousness of the situation. The number of women of childbearing age (between 25 and 35, according to the Chinese government) fell by four million last year and Chinese mothers gave birth to 9.56 million babies, 10% less than in 2021. The figure accentuates the decline in the birth rate for the sixth consecutive year, reaching a record low of 6.77 births per 1,000 people.

«The data supports those demographers who in recent years have been warning that ‘China will be old before it is rich’»

The data supports those demographers who in recent years have been warning that “China will be old before it is rich.” They pointed to the one-child policy, applied by Beijing between 1980 and 2015, as a key factor in this population decline and they were not wrong. However, there are other elements that also contribute to discouraging young couples from not having children or ruling out looking for a second or third child. The high price of housing, the high costs of education and the few possibilities of reconciling work and family hours discourage many families. And it is that the rising cost of living has become a very important ballast for the Chinese middle class, who watches with concern how their salaries are increasingly dwindling.

Added to all this in recent times is the aversion to going to hospitals generated among potential mothers as a result of the Covid pandemic. The strict zero Covid policy applied by the Chinese government – ​​which has gone so far as to prevent women from entering hospitals to give birth due to the lack of negative coronavirus tests – has been a determining factor for many Chinese women to have ruled out be mothers A conviction that will be reinforced by the numbers of infections and deaths that will surely occur during the Lunar New Year festivities, when millions of workers travel to their cities to reunite with their families, in what is considered the largest annual migration on the planet. At the moment, the authorities have already announced that 60,000 people have died from Covid between December 8 and January 12. Figures that are expected to increase between January 21 and 27, when the celebrations will take place.

“The demographic decline questions the objectives for 2035 set by Xi, who wants China to become the world’s first superpower by that date”

On the other hand, the demographic decline will hinder the plans of the Chinese authorities to turn the Asian giant into a technological power, to the point of questioning the objectives for 2035 set by Xi, who wants China to become the first superpower by that date. world. An issue on which local demographers have been warning for some time, to the extent that this population drop means less labor, which will affect both production and consumption and the country’s debt, to the extent that aging of the population will increase social and health costs. On the horizon is the acceleration of the number of Chinese over 60 years of age, which in 2022 amounted to 490 million, and the drop in the working-age population, which stands at 875 million.

This growing social gap, with an increasingly reduced labor force and a growing pension system, places the demographic problem as one of the most important challenges facing Xi in his third term, which is full of challenges, to which more complex: from turning China into the first world power to achieving the incorporation of Taiwan, to endowing the country with a solid welfare state.

And it is that for Xi it is essential to stop the decline in the workforce in his country. Not only as the engine of the Chinese economy, but also to allow Beijing to maintain its geopolitical and economic pulse with the United States for world supremacy. An issue that can only be resolved with an increase in productivity, which suggests an increase in labor costs and, possibly, a relocation of its manufacturing industry to Southeast Asia.

Undoubtedly, these changes will have an impact on world trade. It is not for nothing that China is the world’s factory and its role is such in the supply chain that any change in its productivity, due to labor shortages or economic slowdown, can cause an unexpected effect in the field of supply in the economy. international.