Well, what did you expect Chinese officials to talk about at Davos?
Yesterday, Premier Li Qiang said in a speech at the World Economic Forum in Davos, Switzerland, that China’s economy is expected to have grown 5.2% in 2023. Which would exceed the government’s target of “around 5%” set in March.
Li’s estimate roughly agrees with the average 5.3% expected by economists. In 2022, China’s economy grew at a 3% rate. That was the second-lowest growth rate in more than four decades as the country’s now-abandoned “zero-Covid” hit economic activity.
But also yesterday, the National Bureau of Statistics said that China’s population decline has accelerated. The total number of people in China dropped by 2.75 million – or 0.2% – to 1.409 billion in 2023. The drop surpassed the 850,000 decline recorded in 2022. The 2022 drop was the first time the recorded population had declined since the mass deaths of the Mao-era famines.
The population decline is going on at both ends, deaths and births. In 2023, total deaths rose 6.6% to 11.1 million, with the death rate reaching the highest level since the chaos of the cultural revolution in 1974. At the same time, new births fell 5.7% to 9.02 million. The birthrate was the lowest ever recorded at 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022.
It’s not an overstatement to call the decline in population a “demographic time bomb.” An aging population imposes rising costs for care and financial support at the same time as a falling population means there are fewer working taxpayers. The Chinese Academy of Sciences has predicted the pension system in its current form will run out of money by 2035. By then the number of people in China above 60 years old, the national retirement age, will have increased from about 280 million today to 400 million. That’s a larger number than today’s entire U.S. population.
Government policies to encourage families to have more children have largely failed. Surveys cite the high costs of living in China as well as meagre support for working women.
