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How China’s Population Decline Will Impact Doing Business in the Country
China’s demographic shift is worrying policymakers but in the short term, the labor force remains sufficient and business opportunities are emerging in new subsectors.
China is the world’s most populous country, but its population growth has been slowing down in recent years. In 2022, China’s population declined for the first time in 60 years, which could mark the start of a long-term decline – thereby affecting the country’s economy and business environment. Among others, the long-term economic impact of an aging population and a declining workforce are key concerns.
In this article, we will examine the extent of China’s population decline, the potential economic consequences of this demographic shift, and how businesses can cope with relevant challenges.
How much has China’s population declined?
China’s population has declined for the first time in six decades. In 2022, mainland China’s overall population fell to 1.4118 billion, down from 1.4126 billion a year earlier, with a decline of 850,000 people, according to the National Bureau of Statistics (NBS). The UN’s demographic modeling reveals that China’s population may drop to 1.313 billion by 2050 and fall below 800 million by 2100.
The demographic shift is caused by the decreasing birth rate, coupled with a rapidly aging population. In 2022, the national birth rate fell to a record low of 6.77 births for every 1,000 people, down from 7.52 in 2021. Meanwhile, China had 280.04 million people aged over 60 at the end of 2022, up from 267.36 million in 2021.
Corresponding to these changes, China’s working-age population – those between 16 and 59 years old – decreased from 62.5 percent in 2021 by 0.5 percent and stood at 875.56 million at the end of 2022.
Why is China’s population declining?
One of the key drivers behind China’s declining population is its one-child policy, which was introduced in 1979 and had been strictly implemented until 2015. Originally designed to control population growth, the policy resulted in a reduced number of births and a significant imbalance in gender ratios. This has led to a decline in the number of women of childbearing age. And the smaller size of this demographic, combined with the rising costs of raising children, may continue and accelerate in the coming decade.
Another factor is the country’s rapidly aging population. China’s life expectancy has increased significantly in recent decades, resulting in a rising number of elderly individuals. This trend is expected to continue, with the population of individuals over 65 years old projected to double by 2050.
Photo: Camilla Davidsson
China’s Demographic Shift: Impact of Continued Population Decline (china-briefing.com)
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