In 1990, the median age in China was 23.7. By 2023, the median age was 39.1. Photo / 123RF
The biggest challenge China faces right now comes from within.
China is experiencing population decline on a scale and at a speed the world has never seen.
This will create ripples that will be felt across China and the world for decades to come.
The impact on China’s long-term growth rate could imperil Beijing’s mission to become a global power to rival or replace the United States.
And the huge shortage of labour will potentially affect supply chains of products including shoes, mobile phones and electric vehicles.
“It’s almost impossible to reverse a demographic decline,” said Louise Loo, the head of Asia economics at research firm Oxford Economics.
She estimated China’s shrinking workforce could shave 0.5% off annual gross domestic product growth over the next decade.
In 1990, the median age in China was 23.7, according to United Nations data. The average Chinese woman had 2.51 children, well above the replacement rate of 2.1 needed to keep the population stable.
By 2023, the demographic picture had changed dramatically. The median age was 39.1, and women were having an average of one child.
In 2022, according to Chinese census data, China’s population peaked at 1.4 billion. Now, it is declining.
China is now on an alarming trajectory. The United Nations projects that in 2050, China’s population will fall to 1.26 billion and the age distribution will worsen. About 10% will be aged under-15 - but about 40% will be over 60.
By 2100, China’s population will more than halve to 633 million, according to UN projections. A mere 49 million people, or 7.8%, will be under the age of 15. In contrast, almost half - a staggering 52% - will be over the age of 60.
Here’s how China got into this predicament, and what it means for the world.
Central to China’s current woes are the population control measures that China introduced in the 1970s.
A government campaign to marry later, have fewer children and have longer gaps between births saw the birth rate come down sharply in the early 1970s.
Amid fears that “later, lower, fewer” was not enough, the Chinese Government formally limited most parents to one child in 1979. Authorities often turned to forced sterilisations and abortions to carry out the one-child policy, levying crippling fines for excess births.
The harsh approach meant that the one-child policy worked - albeit too well. Birth rates declined precipitously, forcing authorities to ease the policy in 2015 and allow parents to have two children in 2016, then three children in 2021.
Birth rates have not rebounded, aside from a small post-Covid blip in 2024. In fact, as population control measures were lifted, the birth rate dropped even further - from 1.77 children per woman in 2016 to 1.12 in 2021.
The falling statistic is probably a reflection of the rising cost to raise a child in China, which averages about US$74,963, including food, health insurance and tuition between birth and college graduation, according to a report from the Beijing-based YuWa Population Research Institute. The cost is even higher in big cities: It costs US$140,747 to raise a child in Shanghai.
The Chinese Government is now throwing money at the problem, but it may come as too little, too late.
Last month, Beijing unveiled a new subsidy of about US$500 a year for the first three years of a child’s life. On social media, some commentators noted they would consider having more children if the subsidy were 10 times what’s being offered.
Many would-be parents are deterred by the financial and lifestyle burdens that children bring.
“I’m afraid of having children. I don’t want kids. Raising one requires sacrificing too much, especially for women,” said Zhao Zijuan, 35, an executive of a tech company in Hangzhou.
“I have no intention of making that kind of sacrifice. Life is already exhausting, and I just don’t want to make it even harder.”
Zhao and her husband of seven years don’t consider themselves to be outliers. In fact, many similar-aged friends and colleagues have made the same decision. “Some people call me selfish, but I don’t care. I just want to live life on my own terms,” Zhao said.
To try to turn the tide on the birth rate, the Chinese Government is attempting to convince an increasingly sceptical Gen Z to get married.
Only 6.1 million Chinese couples registered for marriage in 2024, less than half the 13.5 million who tied the knot in 2013, according to China’s Ministry of Civil Affairs.
Marriage rates are a good proxy for future birth rates given that almost all Chinese children are born to married parents.
Ardy Yan, 46, a data analyst from China’s eastern Fujian province, is one of those who has no interest in marriage.
“Getting married, having children and continuing the family line are not responsibilities or obligations that everyone must fulfil. We only live for a few decades in this world, and we should spend more time enjoying it,” Yan said, adding he would use some of his spare time to care for his ageing parents.
Still, the Chinese state persists at all levels. Universities teach “love courses” on dating etiquette, companies ask their single employees to marry within a set amount of time and local governments have turned to offering cash subsidies for marriages.
The Government has even moved to curtail public discourse questioning the value of marriage, with state media going so far as to criticise talk-show skits that glorify divorce.
For those who do get married, the state continues to play an intrusive role: Family planning officials who were once tasked with keeping the birth rate down now pester newlywed women about plans to have children and when their most recent period was.
Not only are there fewer new Chinese, the older Chinese are sticking around longer.
China’s life expectancy has been ticking up, and the number of people in the elderly population is expected to double over the next 30 years.
China’s ageing population will put unprecedented strain on the country’s pension system, which is largely funded through taxpayer revenue. By 2100, according to the UN, there will be more people outside the workforce than within it.
The ageing population could create a vicious cycle. Elderly people “will need the Government to take care of them,” said Yi Fuxian, a demographer at the University of Wisconsin at Madison. “But there will not be enough resources to support the children. Without enough money for childbearing costs, it will be very difficult to improve the birth rate.”
For decades, China enjoyed a role as the “world’s factory,” drawing upon its immense labour force to manufacture goods cheaply and quickly. As the number of working-age people in China drops precipitously, that era may now be coming to an end.
“China’s manufacturing capacity currently comprises 30% of the global total. But that will have to decline, because China won’t have enough labour productivity,” Yi said. “The collapse of China’s manufacturing capacity is unavoidable.”
It’s not just an issue of numbers. It’s also an issue of attitude. “China as the world’s factory was primarily made possible through the generation born between 1960 and 1980,” Yi said. “Those people were very willing to do manufacturing work and work in factories. But now, the younger generations simply aren’t willing to work in factories.”
Other countries have addressed worker shortages through immigration, something that Beijing, which places a premium on cultural homogeneity, has been reluctant to embrace.
Instead, China is increasingly looking towards robots to make up for the worker and productivity shortfall - but automation will have limited impact in some sectors, such as service industries.
Factories and manufacturers may already be feeling the pinch. Labour costs have risen in the past few years for LC Sign, a Guangzhou-based digital sign manufacturer with around 200 factory workers.
“We are already facing competition,” said Tony Zhu, LC Sign’s head of marketing, pointing to sign manufacturers in India, Europe and Mexico. “We aren’t the cheapest option. Among our [foreign] competitors, our prices are a bit higher, so there’s competition there.”
LC Sign is not worried about China’s shrinking labour force - for now. But “perhaps in the next five or 10 years we’ll face this problem”, Zhu said.
With his tariff regime, United States President Donald Trump is trying to convince American manufacturers to move out of China and back to the US, but this effort will be hampered as companies flock to wherever labour is cheapest, which will probably not be in China.
Yet “if China’s manufacturing capacity collapses too quickly, other countries - India, in Southeast Asia, elsewhere - will not have time to build up their manufacturing capabilities and replace Chinese jobs,” said Yi, the demographer.
The result for consumers around the world: less efficient manufacturing and more inflation for goods such as iPhones and Nike sneakers.
The impact for China will be even greater, Yi said. “It will be a challenge for China’s economy, politics, society, culture and national security - it will be a comprehensive challenge.”
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