China’s population falls for a third straight year, GBA bucks the trend

Analysis

China’s demographic challenges have deepened with the country’s population falling for the third consecutive year, according to government data cited by the Associated Press (AP). The decline, combined with an aging population and a shrinking workforce, poses significant risks for the world’s second-largest economy.

The Greater Bay Area—an economic hub encompassing Hong Kong, Macau, and nine Guangdong province cities—provides a snapshot of China’s urban demographic trends. As of earlier this month, a report highlighted that the Greater Bay Area’s population reached 86.7 million in 2024, growing marginally by 0.2% year-on-year. Despite this modest rise, challenges such as low birthrates, aging residents, and regional migration imbalances mirror national patterns.

National decline in population

China’s total population fell to 1.408 billion at the end of 2024, marking a drop of 1.39 million from the previous year. This continues a trend that began in 2022 and underscores demographic pressures that have plagued other East Asian nations, including Japan and South Korea. The country’s population decline is attributed to various factors, including rising living costs, delayed marriage and childbirth, and young adults prioritizing education and careers.China’s demographic trajectory has been shaped by its tumultuous history and stringent population policies. Following World War II and the Communist Party’s rise to power in 1949, the country experienced rapid population growth. By the 1970s, concerns over food security and economic sustainability prompted the introduction of the “one-child policy,” which sought to limit family sizes through strict enforcement measures. Violations led to fines, forced abortions, and other punitive actions.

The preference for male offspring, especially in rural areas, exacerbated gender imbalances as families resorted to selective abortions despite government campaigns against the practice. Official data now lists the sex ratio at birth as 104.34 males for every 100 females, though independent estimates suggest the imbalance is more pronounced. This disparity has contributed to social challenges, including a growing population of unmarried men.

Aging population and workforce concerns

China’s rapidly aging population presents a major economic hurdle. As of 2024, more than one-fifth of the population—322 million people—is aged 60 or older, accounting for 22.9% of the total. By 2035, this proportion is expected to exceed 30%. This demographic shift is straining China’s underfunded pension system, with many citizens opting out of contributions, further jeopardizing its stability. The government is considering raising the retirement age, currently one of the lowest in the world, to mitigate these pressures.

Compounding these issues is the shrinking working-age population. The combination of fewer births and an aging workforce threatens the economic engine that has powered China’s rise over the past four decades. A declining labor pool could lead to slower economic growth and reduced global competitiveness.

Urbanization and regional trends

Despite the population decline, urbanization continues at a steady pace. In 2024, 10 million additional people moved to cities, increasing the urbanization rate to 67%. The Greater Bay Area exemplifies this trend, with its cities attracting migrants from rural areas. However, this migration has led to regional disparities, with rural areas facing depopulation and a diminished labor force.

In the Greater Bay Area, the slight population growth contrasts with challenges such as rising housing costs and a low birthrate. Some urban schools and kindergartens, faced with dwindling enrollment, are being repurposed into care facilities for the elderly, reflecting the broader shift in societal needs.The demographic crisis is testing the resilience of China’s economy. With fewer young people entering the workforce, the country risks losing its competitive advantage in manufacturing and other labor-intensive industries. Meanwhile, government spending on military modernization and infrastructure projects continues to rise, even as social welfare programs struggle to meet demand.

Efforts to boost birthrates through financial incentives, such as cash payouts for families with up to three children and housing subsidies, have yielded limited results. Cultural shifts, including changing attitudes toward marriage and parenthood, have dampened the effectiveness of these policies.China’s demographic trends mirror those seen in neighboring East Asian countries like Japan and South Korea, where low birthrates and aging populations have similarly strained economies. Unlike Western nations that offset population declines through immigration, China’s restrictive immigration policies leave few options for replenishing its workforce.

“Growing old before growing rich”

The phrase “growing old before growing rich” has become a common refrain among analysts discussing China’s demographic challenges. As the world’s second-largest economy, China faces the dual pressures of maintaining growth while addressing the needs of an aging population. The next decade will be crucial in determining whether China can adapt to these shifts and sustain its economic momentum.Policy discussions are increasingly focused on structural reforms to address these challenges. Proposals include raising the retirement age, improving access to affordable childcare, and enhancing workplace flexibility to encourage family growth. However, the success of these measures will depend on the government’s ability to foster cultural and economic conditions conducive to long-term change.

The demographic data from the Greater Bay Area offers valuable insights into China’s urban and regional trends. Yet, as the nation grapples with population decline, aging, and labor shortages, the path forward will require bold and innovative solutions. The stakes are high, not only for China but for the global economy, which remains deeply interconnected with the country’s fortunes. MDT/AP