Shrinking population could pose a risk to the global economy

China’s population is shrinking for the first time in decades

Due to the persistently low birth rate, China is threatened with a labor shortage.

(Photo: REUTERS)

Beijing China’s population has shrunk for the first time in six decades. At the end of December, the most populous country in the world had 1.412 billion inhabitants, around 850,000 fewer than in the previous year, according to the statistics office in Beijing. According to the statisticians, a population decline was last registered between 1960 and 1961.

China’s authorities and the United Nations (UN) originally expected that point to be reached in ten years. The UN assumes that India will overtake China as the most populous country in the world this year.

The official figure of 9.56 million births in 2022 means China’s economy will grow more slowly in the future, warns Yi Fuxian, an expert on population development in China and a researcher at the University of Wisconsin-Madison. China is in danger of falling, which is dangerous both for the country itself and for the world.

Experts have long warned that China will grow old before it gets rich. But the demographic and economic prospects are “much bleaker than expected,” Yi stresses. The low birth rate of 1.2 children per woman and the one-child policy that has been in place for decades mean that fewer and fewer workers have to look after more and more old people. According to the statistics office, people of working age between 16 and 59 made up 62 percent of the recorded population last year.

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The last baby boomers born in the late 1970s, before the one-child policy came into force, are still part of the labor force. But as soon as they leave, there is a risk of severe labor shortages that could slow down the world’s second-largest economy. The growth engine for the global economy in recent years could start to sputter.

Relaxation of the one-child policy does not lead to higher birth rates

For years, the authorities have been trying to encourage families to have more children. In 2016, the one-child policy that had been in place for almost two and a half decades was relaxed and two children per family were allowed. But this did not lead to the desired increase in the number of births. Since mid-2021, three children per couple have been allowed. But even in combination with cash bonuses, the desired effect is not achieved.

Young people in China

The job market and universities could suffer significantly from a lack of young talent.

(Photo: dpa)

Expert Yi predicts that the strong decline in the birth rate will mean that many universities will have to close due to a lack of young people, thereby weakening China’s innovative power. The manufacturing sector will suffer from labor shortages and will inevitably shrink. This in turn could lead to higher prices and in the long term also drive inflation in the USA and the EU.

Yi has been warning since 2018 that China’s population is shrinking, putting the actual population at less than 1.28 billion. In 2013 he wrote the book Big Country. Empty Nest,” in which he criticizes China’s birth control.

The fact that the current decline is apparently so dramatic that the official forecast also had to be corrected shows the extent of the demographic crisis that is “beyond all imagination”, according to the expert. This also means that previous economic, social, foreign and defense policies are based on “incorrect demographic data” that need to be adjusted. Growing prosperity is the most important legitimation for the Communist Party, which has been in power since 1949.

More: The ten countries with the most inhabitants

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