Chinese shudders: Fewer people is bad news
For an economy already caught in a slowdown, Wednesday’s release of China’s population data made it a double whammy. The official headcount fell for the second straight year in 2023. The decline of 2.08 million, though small for a country of more than 1.4 billion, was twice the fall in 2022, its first in six decades.
Notably, the number of those aged 16-59 dropped by 10.75 million, while those above 60 increased by 16.93 million. China’s covid toll was estimated at about 11.1 million last year and 10.4 million in 2022. It now faces an adverse demographic turn, with fewer people who can contribute to economic activity even as an elderly bulge adds to its welfare burden.
Beijing abandoned its misguided one-child policy only in 2016, having found that prosperity tends to spell smaller families anyway. Its efforts since then to get people to have more children will take time to work. While China’s economy grew 5.2% in 2023, it was among its worst performances in over three decades.
In dollar terms, its output actually shrank. Beijing is betting on high-tech advances and domestic consumption reshaping the economy, with “common prosperity" as a slogan. How it’ll pan out is anybody’s guess.
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