China records its first population decline in 60 years

Hong Kong

China The population shrank in 2022 for the first time in more than 60 years, a new milestone in the country’s worsening demographic crisis with major repercussions for the slowing economy.

The population in 2022 decreased to 1.411 billion, down about 850 thousand people from in the previous yearChina’s National Bureau of Statistics (NBS) announced during a briefing Tuesday on the annual data.

Analysts said the decline was the first since 1961 during the Great Famine triggered by former leader Mao Zedong’s Great Leap Forward.

The population is likely to trend downward from here in the coming years. “This is very important, with implications for potential growth and domestic demand,” said Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management.

The birth rate also fell to a record low of 6.77 births per 1,000, down from 7.52 the year before and the lowest since the founding of communist China in 1949. About 9.56 million babies were born, compared to 10.62 million in 2021 – despite pressure from Government to encourage more married couples to have children.

The new data came along with the announcement of nobody China’s worst annual economic performance In nearly half a century, with the economy expanding just 3% for the year – well short of the government’s target – underlining the acute economic challenges the country faces as its labor force shrinks and its growing demographic retires.

It also comes on the heels of the UN’s prediction last year India It will overtake China to become The largest country in the world in terms of population in 2023.

The demographic crisis in China, which is expected to have an increasing impact on growth in the coming years, has been a major concern for policymakers.

Beijing scrapped its decades-old and highly controversial “one-child” policy in 2015, after realizing that the restriction had contributed to a rapidly aging population and shrinking workforce that could severely upset the country’s economic and social stability.

To stem the declining birth rate, the Chinese government announced in 2015 that it would allow couples to have two children. But after a brief spike in 2016, the national birth rate has continued to fall.

policy makers Further easing of restrictions on births in 2021, allowing three children, and stepping up efforts to encourage large families, including through a multi-agency plan passed last year to boost maternity leave and provide tax deductions and other perks for families. But these efforts have not yielded results so far amid changing gender norms, the rising cost of living and education, and looming economic uncertainty.

Many young people choose to marry later or He decides not to have children Altogether, while decades of single births have led to a widely discussed social phenomenon of families with one adult child as the parent’s sole caregiver – the pressure on the post-80s generation, who are expected to care for aging parents and raise young children.

The pandemic years added to that pressure, as Covid-19 and the Communist Party’s tough response to the outbreak hit the economy and generated deep political frustration, with some young people rallying around the phrase “we are the last generation”, in the wake of Shanghai closed for two months.

Tackling demographic challenges remained a top political priority, with Chinese leader Xi Jinping vowing to “improve population development strategy” and ease economic pressure on households during a keynote speech at the start of China’s five-year party congress in October.

“[We will] Create a policy system to increase birth rates and reduce the costs of pregnancy, childbirth, child rearing and education.”

“We will follow a proactive national strategy in response to population aging, develop elderly care programs and services, and provide better services for elderly people living alone.”

China’s elderly make up a fifth of its 1.4 billion people, officials said on Tuesday, with the number of those aged 60 and over increasing to 280 million — or 19.8% of the population — last year. That’s an increase of nearly 13 million people age 60 and over as of 2021.

Graying of the Chinese population follows a similar trajectory Play in the developed economies of Asia.

Japan and South Korea have also seen their birth rates decline sharply and their populations are aging and starting to contract along with economic development, posing challenges for their governments in supporting their large aging populations, while dealing with a dwindling workforce.

China’s working-age population peaked in 2014 and is expected to shrink to less than a third of that peak by 2100, while the number of people aged 65 and over is expected to continue to rise substantially, outstripping the population in The working age in China is near 2080, according to analysis Published by the World Economic Forum last year.

The latest national data shows that the number of adults of working age has continued to shrink – by the end of 2022 they will make up 62% of the population, down 0.5% from the previous year, and analysts point to severe challenges ahead.

“The Chinese economy is entering a critical transitional period, and can no longer rely on an abundant, cost-competitive workforce to drive industrialization and growth,” said Frederic Neumann, chief economist at HSBC in Asia.

“As the supply of workers begins to shrink, productivity growth will need to pick up to maintain the economy’s rapidly expanding pace.”

Neumann added that while China’s economic growth is likely to outpace that of developed markets for years to come, it is likely to slow “because increases in productivity are unable to offset the drag from a shrinking labor force.”

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