China’s Declining Population: Can Beijing Change Tack to Focus on People’s Lives?

Editorial

15:00 JST, January 29, 2024

The decline in China’s population is accelerating. President Xi Jinping’s administration is facing a pressing need to shift the focus of state management to people’s lives, to deal with the falling birth rate and aging society.

China’s population was 1.40967 billion at the end of 2023, down 2.08 million from a year earlier. This is the second consecutive year that the population has dropped, following a decline in 2022 that was the first in 61 years.

The number of births also went down for the seventh straight year, falling 540,000 from the previous year to 9.02 million. China can be said to have entered an age of full-fledged population decline.

Falling birth rates are a phenomenon widely seen in advanced countries, as values diversify and women enter the workforce. However, there are also significant circumstances unique to China.

Concerned about explosive increases in the population, the Chinese government introduced the “one-child policy” in 1979, forcibly preventing population growth. This restriction remained in place until the end of 2015, and the birth of a third child was only allowed in 2021.

The delay in correcting the one-child policy has obviously contributed to the rapid decline in the birth rate.

Countermeasures such as expanding childcare facilities and providing child-rearing subsidies to people with two or more children are being implemented across China, but these steps have not been successful. The number of marriages has also halved since its peak in 2013.

In China, an increasing number of young people are hesitant to marry or have children due to disparities in wealth and the rising cost of education. Narrowing the wealth gap is an urgent task, as the richest 1% of the population is said to hold as much as 30% of China’s wealth.

China’s population is also graying more quickly than Japan’s, but the medical, nursing care and pension systems have not kept pace. The situation is critical, with some estimates suggesting that financial resources for pensions will be exhausted by 2035.

In China, people become eligible for pension benefits once they reach the retirement age set for the particular social group they belong to. The Xi administration plans to raise the retirement age, but both employees, who will get their pension benefits later in life, and members of the younger generation, who may be deprived of employment opportunities, are protesting the plan.

Forcing institutional reform could lead to social unrest. Without carefully explaining the need for reform to the public, the administration will not be able to convey its sense of crisis about the declining birth rate and aging society.

Japanese, U.S., and European companies have been expanding their businesses into China with expectations for its abundant labor force and huge market. The declining population might provide an opportunity for foreign companies to rethink their investment stance in China.

Even as its economic growth slows, China is spending enormous parts of its budget on military expansion, and on monitoring and controlling its people.

The Xi administration should recognize that social stability cannot be maintained if it keeps to such a strong-nation policy.

(From The Yomiuri Shimbun, Jan. 29, 2024)