China’s Shrinking Population: What It Means for the Rest of the World – Expert Panel | China

China has entered a period of “negative population growth,” a key moment in the country’s history. As recently as 2019, the United Nations forecast that the population would peak in 2031-32, but despite government efforts to reverse the trend, China has now entered what is expected to be a long period of population decline.

The ongoing demographic shift could have profound implications for everything from how the economy works to Xi Jinping’s legitimacy. The Guardian spoke to experts about the impact on everything from climate change to the Chinese Communist Party.

climate change

“There has long been talk of the need for economic restructuring through a gradual shift toward higher-value, cleaner, more advanced high-tech and service sectors, away from dirtier, low-cost, high-volume, low-value-added manufacturing jobs.

“This demographic trend reinforces the notion that it is about the quality of economic growth and not just the quantity of raw output. The good news is that moving away from fossil fuels and pursuing what China calls “ecological civilization” would help China improve the quality of its economic growth and, in turn, improve the quality of life of its shrinking population.” Bernice Lee, Hoffmann Distinguished Fellow for Sustainability and Research Director, Futures, at Chatham House.

women’s rights

“In order to increase fertility rates, the government should adopt measures that soften maternity punishment, ie provide women with children with benefits and protections in the workplace so that they are not afraid of being punished for marriage and childbirth in the workplace.

“However, since China is not a robust welfare state and the economy is slowing, these gender equality policies that require state investment and the redistribution of resources to women may not be what the state is prioritizing.

“What has happened is that experts and policymakers, on the one hand, are encouraging young people, especially women, to get [married] earlier and have more children – which doesn’t seem to be working (marriage and fertility rates have continued to decline despite what experts say), and on the other hand, employers discriminate against women as [they] are perceived as requiring more care and are therefore considered part-time employees.” Yige Dong, Assistant Professor in the Department of Global Gender & sexuality Studies, University at Buffalo, SUNY

China’s status as a global superpower

“The slowdown in China’s economic growth is an interesting real-world experiment to see whether economically prosperous countries appear more threatening than struggling ones. Is external threat perception more driven by a country’s policies and actions, or by its economic capabilities? And once foreigners conclude that China poses a threat, will they be willing to correct those conclusions when China no longer appears to be an economic powerhouse?”

“China’s declining population and aging population … is a reminder of America’s great advantage in being open to talented, hardworking immigrants from around the world.” Susan Shirk, author of Overreach: How China Derailed its Peaceful Rise.

The world economy

“In the short term, a reopening of the Chinese economy this year should provide a major source of strength for the rest of the global economy at a time when major western economies are grappling with higher inflation and interest rates and the war in Ukraine.

“Beyond next year, however, the Chinese economy’s ability to be the engine of global growth it has historically been seems increasingly in question.” Roland Rajah, director of the Indo-Pacific Development Center at the Lowy Institute

The Communist Party

“An aging population … will reduce China’s tax revenues and pension contributions, all of which will affect the extent to which the party-state can care for its citizens. The unspoken social contract between the party and its citizens is the provision of a higher standard of living without political liberalization. Longitudinal studies (up to the pandemic) show that, on the whole, Chinese citizens are satisfied with the central government, but this depends to some extent on their ability to provide material goods.

“It is now questionable whether the party state can continue to do this in view of the demographic change.” dr Jennifer Hsu, research fellow at the Lowy Institute

Chart comparing the populations of India and China

The Chinese economy

“One of the concerns for China is the speed at which the population is aging as it transitions to a middle-income economy… China is getting old before it gets rich.

China’s working age to dependency ratio rose from 37% in 2010 to 45% in 2021, meaning that for every 100 people, 45 needed assistance. Working age is considered to be between the ages of 15 and 64.

“This demographic development can also be expressed in the employed-pensioner ratio. In 2020, there were 3.74 people of working age for every retiree, but this ratio is projected to fall to 1.68 by 2045. This will have a huge impact on the economy in terms of the strain on China’s healthcare system and pension shortages, thus impacting areas of economic growth. Innovation… tends to be led by a younger workforce, not an aging one.” dr Jennifer Hsu, research fellow at the Lowy Institute.

“The most important thing is the declining birth rate. That means China will have a smaller workforce in the future, and that will reduce the size we expect China’s economy to eventually be in the future, other things being equal.

“We already knew that China’s labor force has been shrinking since the middle of the last decade and that the fertility rate is well below what is required for a stable population. But the latest figures show that the birth rate has continued to decline at a fairly rapid rate. So the picture of China’s demographic problems is getting worse and worse.

“The ability of the Chinese economy to be the engine of global growth that it has been in the past is increasingly being questioned.” Roland Rajah, director of the Indo-Pacific Development Center at the Lowy Institute

graphic

Xi Jinping

“For Xi, this trend was noted in his report to the 20th National Congress of the Chinese Communist Party in 2022: ‘We will improve the population development strategy, establish a political system to increase birth rates and reduce the cost of pregnancy and childbirth, Child rearing and schooling.’ But we’ve seen little…success with China’s move toward a two- and three-child policy.

“If the party is unable to provide a better life for its citizens, it will question not only the legitimacy of the party but also that of Xi Jinping.” dr Jennifer Hsu, research fellow at the Lowy Institute