China’s population decline for second year raises concerns about long-term growth
China’s population fell for a second straight year in 2023 as a falling birth rate and a wave of Covid-19 deaths when strict lockdowns ended accelerated a contraction that will have profound long-term effects on the economy’s growth potential.
The National Bureau of Statistics said China’s total population fell by 2.75 million, or 0.2%, to 1.409 billion people in 2023.
This decline is greater than the population decline of 850,000 in 2022, which was the first decline recorded since 1961 during the Great Famine under Mao Zedong.
China saw a spike in Coronavirus cases nationwide early last year after three years of careful monitoring and quarantine measures that kept the virus largely under control until authorities suddenly lifted restrictions in December 2022.
Total deaths last year rose by 6.6% to 11.1 million, with the death rate reaching the highest level since 1974 during the Cultural Revolution.
The number of newborns decreased by 5.7% to 9.02 million, and the birth rate recorded a record low of 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022.
The country’s birth rate has been declining for decades as a result of the one-child policy implemented from 1980 to 2015 and rapid urbanization during that period.
As was the case with previous economic booms in Japan and South Korea, large populations have moved from rural farms in China to cities where it is more expensive to have children.
What contributed to the decline in the desire to have children in 2023 was the rise in youth unemployment rates to record levels, the decline in wages for many administrative employees, and the worsening crisis in the real estate sector, where more than two-thirds of families’ wealth is saved.
New data heightens concerns that the growth prospects of the world’s second-largest economy are diminishing due to a decline in the number of workers and consumers, while rising costs of elderly care and retirement benefits put more pressure on debt-burdened local governments.
India surpassed China as the world’s most populous country last year, according to United Nations estimates, sparking further debate about the merits of moving some China-based supply chains to other markets, especially as geopolitical tensions escalate between China and the United States.
In the long term, UN experts expect China’s population to shrink by 109 million people by 2050, more than three times the decline mentioned in their previous forecast issued in 2019.
