Consequences of China’s population decline
Jorge Costa Oliveira
China’s population began to shrink in 2022. The UN’s projections – revised several times, the last one in 2024 – point to a gradual decline to 633 million inhabitants by 2100. By 2050, China’s population is expected to decrease by 13.7%.
If the current decline in fertility and marriage rates continues, the figures could turn out even worse.
In the short term, the first consequence is an aging population, with 400 million people aged 60 or older by 2035. This aging trend will pose major challenges to the country’s health care and social security systems, with costs potentially reaching 25% of China’s GDP by 2050.
Another consequence will be a labor shortage. For now, internal migration from rural to urban areas has sustained an “industrial reserve army” that supplies the workforce. But this migration wave is nearing its end and is expected to peak by 2030.
According to the World Economic Forum, after reaching 925 million in 2011, China’s working-age population is projected to fall to 700 million by 2050.
Unlike many Western countries already undergoing a rapid demographic winter, China is not using immigration to offset its fertility decline.
The proportion of immigrants relative to the total population in China was just 0.2% in 2020. Although very recent measures – namely the so-called “K visa” – have made it easier for skilled foreign workers to stay in China, it remains difficult for foreigners to obtain residency rights in China (by comparison, 17% of people living in Germany in 2021 were born abroad).
Additionally, the Chinese public opinion reaction, strongly objecting the “K visa”, does not bode well for the future. Linguistic barriers will only play a role against more immigration, albeit not as strong as “cultural” objections (that we are seeing surfacing in Japan).
At the same time, there continues to be a significant outflow of Chinese emigrants. UN demographers estimate that from 2023 to 2100, an average of 310,000 Chinese nationals will leave the country each year – a total of roughly 24 million people, many of them skilled workers.
This labor shortage could be partially offset by gains in innovation and productivity, as well as through automation, robotics, and artificial intelligence.
Population decline is expected to slow China’s economic growth. Still, a smaller population could create opportunities to improve quality of life – by investing in health care, education, and infrastructure (as the country has been doing) – as well as reduce pressure on natural resources.
China is also investing heavily in becoming a leader in R&D and advanced technology, leveraging its more educated and aging population to drive sustainable growth through high-tech and innovative industries. This government strategy is also crucial for escaping the so-called “middle-income trap.”
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