China's population peaks last year: Shrinking and aging rapidly

The cost of urban living demotivates couples to create larger families - Photo by EPA, Diego Azubel

The rate of newborns is the lowest since 1949, natural increase is virtually zero and it is assumed that China's population has probably peaked in 2021 and is beginning to decline.

Record low birth rate in China caused demographic stagnation and increased pressure on Beijing authorities to change policy again and encourage families to have three children each.

The rate of 7,52 newborns per 1.000 inhabitants in 2021 is the lowest in China since 1949, when the National Bureau of Statistics began keeping records. China's population grew by just 0,03 percent last year, excluding the migration balance, the smallest increase in 61 years.

10,62 million babies were born in China last year, which is almost 1,5 million less than the previous year. 10,14 million people died in the same period.

The demographic decline is considered an alarming and unplanned consequence of Beijing's long-standing policy of families having only one child. The unpopular policy, which provided for large fines for couples with more than one child, halted China's huge population growth but at the same time led the world's most populous country to a period of declining working-age populations and rising retirees. Preliminary census data show that the proportion of residents over the age of 60 has increased from 18,7 per cent to 18,9 per cent.

To prevent the nation from aging rapidly, Beijing changed its "one child" policy to "two children" in 2016. This, however, did not contribute significantly to the increase in families, as young couples in cities, faced with the high cost of urban living, rarely decide to have more children.

- The demographic challenge is well known, but the rate of population aging is much higher than we expected. New data suggest China's population is likely to peak in 2021, slowing the country's potential development - explains Jivei Zhang, an economist at Pinpoint Asset.

China now allows families to have as many as three children, and is considering various other benefits to motivate young couples. Last year, for example, extra tuition was banned for students, which over the years has grown into a large and profitable industry.

Population stagnation is a threat to China's economic development. In addition to the threat of narrowing the working age segment, the construction industry and the sale of apartments have also stopped.

Demographic expert Huang Wenheng expects the number of newborns in China to be around 10 million in a few years, but that it will certainly start to decline if the authorities do not introduce new measures to facilitate parenting.

- Policies are needed to ensure the population growth rate. Career advancement should be related to whether you have children. "Economic initiatives, and even cash payments, are needed to reduce the financial burden on couples," Huang said.

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