China saw its population shrink in 2022, signaling the magnitude of the demographic challenge weighing on the world’s second largest economy, which has posted sluggish 3% growth.
correspondent in Asia
The Middle Kingdom is shrinking. China’s population, officially estimated at more than 1.4 billion, has declined in 2022 for the first time since the Great Leap Forward famines, signaling the magnitude of the demographic challenge weighing on the second world, whose growth declined to 3%. according to numbers released on Tuesday in Beijing.
The world’s most populous country lost 850,000 residents last year due to a falling birth rate, according to the National Bureau of Statistics (BNS). A total of 9.56 million Chinese were born, an insufficient total to offset the 10.41 million deaths recorded in a society gripped by aging and where new generations are reluctant to give birth. The fertility rate has fallen to 1.15 children per woman in 2021.
An earlier than expected decline
This is a pivotal moment for the resurgent Asian giant, whose population had been growing since the Maoist-era tragedies that claimed millions of lives in the late 1950s. This decline comes earlier than official projections, which put it between 2025 and 2030 Accelerating the demographic challenge against a backdrop of a structural slowdown in growth and rising costs. “This is important news that indicates that the demographic crisis is much darker than expected,” says Yi Fuxian, a researcher at the University of Wisconsin-Madison, and speaks of a “historical inflection”. The demographer still judges the official statistics below reality and says that the Chinese population has been shrinking since 2018. The trend could worsen further in 2023 as the country faces a meteoric Covid epidemic that authorities say has already claimed 60,000 lives but could claim more than a million, according to scientific projections.
That decline is weighing on the economic and geopolitical horizons of the still-developing country, which is forecast to officially lose its crown as the world’s most populous nation to India this year. China joins Japan, Taiwan and South Korea among the declining Asian nations, but reaches this fateful threshold long before it has reached the level of development of its neighbors or achieved a social equivalent. The archipelago started shrinking in 2010 and already had an advanced economic status, and its GDP per capita to date is almost four times that of the Chinese.
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Aging threatens economic dynamism and household finances, which are forced to save to protect themselves against risks. “In China, the level of social protection is not high, and caring for the elderly becomes a big problem as the number of seniors over 60 has surpassed 260 million. Ordinary people should rather save for the future than consume,” says Chan Kung, founder of Anbound, an independent think tank in Beijing.
Demographic anemia will also weigh on the workforce and lead to an increase in labor costs, which has long been one of the assets of the world’s factory to attract multinationals and settle at the heart of global manufacturing chains.
“Uncertain Dream”
Those grim statistics also weigh on the strategic prospects of the giant, which finds itself in a long-term standoff with the United States amid rising tensions in the Asia-Pacific region as well as with its Indian rival in the Himalayas. They pose a challenge to President Xi Jinping, champion of a “Chinese dream” of national rebirth, while the Communist Party’s legitimacy since the economic opening of the 1980s has rested on the growing wealth of the populace, reaffirming the superiority of its model over Western democracies . The communist regime’s efforts to boost the birth rate by easing the one-child policy are met with reluctance among the new generations.
The demographic strain is clouding economists’ projections that China will overtake America as the world’s largest economy by the turn of the next decade. “It’s going to be an uncertain dream,” says a former head of an international institution who was based in Beijing for a long time.
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This demographic lag could also be affecting perceptions of China around the world at a time when international investors are questioning its long-term presence in this market. “Western strategists have tended to mistake a sick old cat for an aggressive lion,” fuels the thesis of the “Chinese threat,” says Yi Fuxian. China remains an inevitable juggernaut, but the demographic wall is reshuffling the cards and re-imagining.
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