China's population fell for a second consecutive year in 2023 as a result of a record low birth rate and a wave of COVID-19 deaths after the end of stringent lockdown measures, sparking concerns about long-term effects on the growth potential of the world's second-largest economy. The National Bureau of Statistics said the total population of China dropped by 2.75 million, or 0.2 per cent, to 1.409 billion last year.
This population decline was significantly more than 850,000 in 2022, which was reported as the highest since 1961 during the Great Famine under the reign of former Chinese leader Mao Zedong. China experienced a dramatic nationwide COVID surge early last year after three years of tight screening and quarantine measures kept the virus largely contained until authorities abruptly lifted curbs in December 2022.
The total number of deaths rose in 2023 by 6.6 per cent to 11.1 million, as the death rate reached the highest level since 1974 during the Cultural Revolution. Additionally, new births fell 5.7 per cent to 9.02 million and the birth rate in China slumped to a record low of 6.39 births per 1,000 people, down from 6.77 births in 2022.
The drop in births reflected a fall in the birth rate that is a long-running economic and societal challenge for China. The population is aging steadily, which could slow economic growth over time and challenge the nation's ability to provide for a larger elderly population with fewer workers. About 9 million babies were born in China last year, half of those born in 2016.
New problems after one-child policy
China had been experiencing a decline in births as a result of the one-child policy implemented from 1980 to 2015 during rapid urbanisation at that time. After ending the contentious policy in 2016, China is now facing the opposite problem, as people moving to cities are opting to not have children due to rising costs.
More and more Chinese are opting to marry later and even those that do often have only one child cause of the high cost of educating children in the highly competitive academic environment. The country's retirement-age population is expected to increase to more than 400 million by 2035 - more than the entire population of the US.
Adding to the burden is the record-high youth unemployment rate in 2023, a sharp decline in wages for white-collar workers and a full-blown real estate sector that houses two-thirds of household wealth. These factors are leading to concerns that China's growth prospects are diminishing due to fewer workers and consumers.
High childcare and education costs put many Chinese couples off having children, while uncertainty in the job market discourages women from pausing their careers. Gender discrimination and traditional expectations that women assume the caretaker role in the family exacerbate the issue, according to demographers.
Local governments have announced various measures to encourage childbirth including tax deductions, longer maternity leave and housing subsidies. However, many of the policies have not been implemented due to insufficient funding and a lack of motivation by local governments.
Concerns over growth potential
China's 2023 rate of 7.87 deaths per 1,000 people was higher than the rate of 7.37 deaths in 2022. All the combined factors have raised doubts over the potential of China's economy, which is said to extend to other countries as well. The state-run Chinese Academy of Sciences sees the pension system running out of money by 2035.
India surpassed China as the world's most populous country in April last year, fuelling debates on the merits of relocating China-based supply chains to other markets owing to rising geopolitical tensions between Beijing and Washington. UN experts have predicted that China's population will, in the long-term, shrink by 109 million by 2050, more than triple the decline of the previous forecast in 2019.
However, China may get some relief next year from a pick-up in marriages in 2023 after the COVID-19 issue has been dealt with. Marriages are a leading indicator for birth rates in China, where most single women cannot access child-raising benefits.
China’s economy for the October-December quarter grew at a quicker rate, allowing the Chinese government to hit its target of about 5% annual growth for 2023 even though trade data and the economic recovery remain uneven. The growth for 2023 is likely helped by 2022’s GDP of just 3% as China’s economy slowed due to COVID-19 and nationwide lockdowns during the pandemic.
(with inputs from agencies)
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