Why is China's Population on the Decline?

The population decline in China in 2022, with more deaths than births, has significant implications due to the country's status as a manufacturing superpower. Manufacturing constitutes a substantial portion of China's economic output, making up nearly 30% of its GDP. Despite a loss of almost one million people in 2022, China's population remains around 1.4 billion, similar to previous years. However, projections indicate a potential decrease of nearly half by the end of the century.

China's population decline can be attributed to its past growth and policies. Following a devastating famine and a subsequent baby boom, the Chinese government implemented the "Later, Longer, Fewer" policy, promoting delayed marriages, longer birth intervals, and fewer births. Later, in 1980, an extreme one-child policy was enforced, supported by measures such as sterilization campaigns, IUD insertions, and induced abortions. While these policies effectively controlled population growth, they also resulted in a fertility rate below the replacement rate of 2.0.

China's attempts to address its declining birth rate included ending the one-child policy in 2016 and briefly experimenting with a three-child policy before allowing families to have as many children as they desire in 2021. However, these measures have not produced the desired results. The unique family structure resulting from the one-child policy, known as the 4-2-1 model, places pressure on only children to care for their aging parents and grandparents, complicating the decision to have multiple children. Financial and work pressures, along with the high cost of raising a child, contribute to the reluctance of young people to have more than one child.

The population crisis in China extends beyond the issue of declining births. The demographic imbalance between the young and the old poses challenges as the country experiences sustained low fertility and an aging population. The population pyramid depicts a narrow base, indicating fewer babies, and a heavier top, representing a larger elderly population. This demographic shift, coupled with a shrinking labor force, poses unique difficulties for China's future.

China's economic modernization in the 1980s attracted foreign investment and facilitated its ascent as a leading global economy. However, the economic growth did not benefit everyone equally, particularly those in rural areas. China remains a middle-income country with a GDP per capita lower than high-income nations. The development of social infrastructure, including healthcare and pension systems, has been lagging, and the slowing economy further complicates these efforts.

The consequences of China's population decline extend beyond its borders. The resource constraints within the country may impede Chinese ambitions and global reach. While population declines are not unique to China, the speed at which it has occurred distinguishes the country's situation. Only four decades ago, China leveraged its population growth to become an economic superpower, all while attempting to curb population growth. Now, with population growth officially over, China must reconsider its future both as a global superpower and for the well-being of its citizens.

The declining population also raises concerns about the sustainability of China's manufacturing sector. With a shrinking labor force, there may be challenges in maintaining the current level of productivity and meeting the demands of global markets. Labor-intensive industries that heavily rely on a large workforce may face difficulties in the coming years, potentially leading to a shift in China's economic landscape.

Moreover, the demographic shift towards an aging population poses significant challenges for China's social welfare system. As the number of elderly citizens increases, there will be a greater strain on healthcare, pension, and social security systems. The current infrastructure may not be equipped to handle the needs of a rapidly aging population, leading to potential gaps in healthcare coverage and financial support for the elderly.

In addition to domestic implications, China's population decline also has global ramifications. As a major player in global trade