China’s first population drop in 60 years could mean economic trouble ahead

The backstory: China is the world's most populous country, with more than 1.4 billion citizens. And its population has continuously grown throughout recent history. In fact, China's population last dipped over six decades ago, during the final year of a nationwide famine in 1961.

More recently: But, experts have predicted a population decline was looming. Over the past couple of decades, China's birth rate has scaled down, and its death rate has been the highest since 1974. At the same time, life expectancy has been increasing, so people are living longer and having fewer babies. So, in 2016, the country scrapped its one-child policy to help bring those numbers back up. And it's been offering incentives, like cash allowances and housing subsidies, to encourage people to have more children.

The development: Based on new government data, the country's population fell for the first time in over six decades last year. On Tuesday, the government said 9.56 million people were born in China in 2022, but 10.41 million died. In total, the population fell by 850,000 from the previous year.

The question now is whether or not China will have enough working-age people to sustain its industry and position as an economic powerhouse. Another concern is a growing burden on healthcare and social security as more people age, and the labor pool shrinks. This downward population trend will likely continue with China's sinking fertility rate. The UN predicted in the long-term that China's numbers will drop by 109 million by 2050.

Next in line to overtake China as the most populous is India, which experts predicted to happen this year. It may have already happened, but we can't be sure because India hasn't done a recent population census because of COVID postponing the one scheduled for 2021.

Key comments:

"In the long run, we are going to see a China the world has never seen," said Wang Feng, a sociology professor at the University of California at Irvine who researches China's demographics. "It will no longer be the young, vibrant, growing population. We will start to appreciate China, in terms of its population, as an old and shrinking population."

"This trend is going to continue and perhaps worsen after Covid," said Yue Su, principal economist at the Economist Intelligence Unit. "The high youth unemployment rate and weaknesses in income expectations could delay marriage and childbirth plans further, dragging down the number of newborns."

"China has become older before it has become rich," said Yi Fuxian, a demographer and expert on Chinese population trends at the University of Wisconsin-Madison.