Why China’s declining birthrate could hit its economy hard

China is undergoing a major demographic shift that is reversing one of its biggest economic strengths: a large, young workforce.

According to research cited in a report, the country’s birthrate has been falling sharply, signalling the end of its long-standing population advantage. Wang Chan-hsi, an associate researcher at the Institute for National Defence and Security Research, noted that this transition is turning into a liability for economic growth.

In his article titled "Observations on China's Population Structure Issues," he explained that the number of newborns has dropped dramatically in recent years.

How fast is China’s birthrate declining?

The scale of the decline is striking.

Wang pointed out that births fell to 7.92 million last year, which is just 44 per cent of the 2016 figure. This not only missed earlier projections of 9 million and 8 million births, but also marked the lowest level since 1949, when the People’s Republic of China was founded.

China’s total population has also begun shrinking, falling to 1.40489 billion and recording four consecutive years of negative growth.

Wang warned that China’s birthrate could soon resemble levels seen in countries like Japan, South Korea and Taiwan within the next three to five years.

What impact is this having on jobs and education?

The effects of falling births are already visible, particularly in education.

Fewer children mean fewer schools and fewer teaching jobs. Around 20,000 kindergartens were shut down in 2024, leading to the loss of more than 240,000 preschool teaching jobs.

Primary schools are also seeing a steady decline in student numbers, dropping by over 2 million students each year since 2023. This has forced many educators to change roles or exit the profession altogether, contributing to rising unemployment pressures.

Is China also facing a gender imbalance problem?

Yes, and it is adding another layer to the demographic challenge.

China’s population structure shows a clear imbalance between men and women, especially across regions. Cities have about 106 males for every 100 females, while rural areas see this ratio rise to 120 males per 100 females.

Wang noted that nearly 30 million unmarried young men live in rural areas, while more than 20 million unmarried women are concentrated in major cities.

This mismatch is reducing marriage rates, which in turn further depresses birthrates, creating a reinforcing cycle of decline.

How does ageing make the problem worse?

China is not just seeing fewer births—it is also ageing rapidly.

Wang highlighted the challenge of “growing old before getting rich,” meaning the country is ageing before reaching the wealth levels typically associated with developed economies.

This creates pressure on healthcare systems, pension schemes  and workforce productivity.

Despite ageing at a pace similar to other East Asian economies, China’s overall wealth remains comparatively lower, making the transition harder to manage.

What are the income challenges among China’s elderly?

The ageing problem is compounded by inequality.

Out of more than 320 million retirees, around 180 million rural pensioners receive less than 200 RMB per month. In contrast, only about 17 million urban retirees earn over 5,000 RMB monthly, representing just 5.3 per cent of the retired population.

This uneven income distribution raises concerns about consumption, savings, and social stability in an ageing society.

What does this mean for China’s future economy?

The long-term outlook raises serious concerns.

Wang cautioned that declining fertility and rapid ageing could disrupt China’s economic and social systems more severely than previously expected. Slower population growth means a shrinking workforce, lower productivity growth and weak consumer demand.

Combined, these factors could challenge China’s ability to sustain its past pace of economic expansion.

(With inputs from ANI)