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China's population is decreasing. The impact will be felt around the world.

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Hong Kong

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 dropped in 2022 to 1.411 billion, down about 850,000 people from the previous year, China’s National Bureau of Statistics (NBS) announced during a briefing Tuesday 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 slump: the far-reaching consequences of the one-child policy that China introduced in the 1980s (but has since abandoned); changing attitudes towards marriage and family among Chinese youth; entrenched gender inequality and the challenges of raising children in China’s expensive cities.

Experts warn that, if maintained, the trend could also pose a problem for the rest of the world, with China playing a key role in driving global growth as the second largest economy.

A plummeting population is likely to compound China’s problems with an aging workforce and slow growth, compounding its woes as it struggles to recover from the pandemic.

The population decline is partly a result of China’s one-child policy, which for more than 35 years has limited couples to having just one child. Women caught going against the policy were often subject to forced abortions, heavy fines and eviction.

Alarmed by the falling birth rate in recent years, the government scrapped the rule. In 2015, it allowed couples to have two children, and in 2021, it increased to three. But the policy change and other government efforts, such as offering financial incentives, had little effect – for a variety of reasons.

High living and education costs and skyrocketing property prices are the main factors. Many people – especially in cities – face stagnant wages, fewer job opportunities and grueling work hours that make raising one child, let alone three, difficult and expensive.

These issues 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 unequal burden. Women also reported facing discrimination at work based on their marital or parental status, with employers often reluctant to pay 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 it is far from enough.

And frustrations have only grown during the pandemic, with a disenchanted younger generation whose livelihoods and well-being have been undermined by China’s uncompromising Covid-zero policy.

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Hear parents in China react to the new three-child policy

A falling population is likely to add to the demographic problems China already faces. The country’s population is already aging and its workforce shrinking, putting enormous pressure on the younger generation.

China’s elderly now make up nearly a fifth of its population, officials said on Tuesday. Some experts warn that the country may be following a path similar to that of Japan, which entered three decades of economic stagnation in the early 1990s, coinciding with an aging population.

“The Chinese economy is entering a critical transition phase, no longer able to rely on an abundant and cost-competitive workforce to drive industrialization and growth,” said HSBC’s Chief Economist for Asia, Frederic Neumann.

“As the supply of workers begins to decline, productivity growth will need to pick up to sustain the heady pace of economic expansion.”

China’s economy is already in trouble, growing just 3% in 2022 – one of the worst performances in nearly half a century, thanks to months of Covid lockdowns and a historic downturn in the property market.

The shrinking workforce could make the recovery even more challenging as China resumes overseas travel and lifts many of the strict restrictions it has maintained in recent years.

There are social implications as well. China’s social security system will likely come under pressure as there will be fewer workers to finance things like pensions and health care – as demand for these services increases due to an aging 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.

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chinese elderly population

Chinese seniors risk being left behind

Given its role in driving the global economy, China’s challenges could have implications for the rest of the world.

The pandemic has illustrated how China’s domestic problems can affect the flow of trade and investment, with its blockades and border controls disrupting supply chains.

A slowdown in the Chinese economy would not only hurt global growth, it 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 lead to slower growth outcomes over the next twenty to thirty years and affect its ability to compete on the world stage with the United States,” said the US Center for Strategic and International Studies. USA. said in an article on its website last August.

China also looks set 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 that of the US, it still has a long way to go. India is the world’s fifth-largest economy, having overtaken the UK last year, and some experts have expressed concern that the country is not creating enough job opportunities to keep up with its expanding workforce.

Still, some researchers say there may be a silver lining to the China news.

“For both climate change and the environment, a smaller population is a boon, not a curse,” tweeted Mary Gallagher, director of the International Institute at the University of Michigan.

Peter Kalmus, a climate scientist at NASA, argued that population decline should not be seen “as a terrible thing”, pointing instead to “exponential acceleration of global warming and biodiversity loss”.

Chinese authorities have stepped up efforts to encourage larger families, including through a multi-agency plan launched last year to strengthen maternity leave and offer tax deductions and other perks for families.

Chinese leader Xi Jinping pledged in October to “improve population development strategy” and alleviate economic pressure on families.

“[We will] establish a policy system to increase birth rates 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 senior care programs and services, and provide better services for seniors who live alone.”

Some places are even offering 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 the age of 2.5 years up to US$510 per month – which could add up to more than US$15,000 in total per child. Other places offered housing subsidies for couples with multiple children.

But those efforts have yet to pay off, with many experts and residents saying much broader national reforms are needed. After Tuesday’s news broke, a hashtag went viral on Weibo, China’s Twitter-like platform: “To encourage childbirth, 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 heavy. My future husband will work overtime until 3am every day until the end of the year,” wrote one Weibo user. “My survival and health are already problems, let alone having children.”