Hot Topics: How China’s lowest birth rate ever could affect the economy and what the government is trying to do

China’s population has declined for the first time in six decades. The national birth rate for 2022 fell to a record low, and the country’s worsening demographic crisis has far-reaching effects on economic growth.

Deaths outnumbered births in China as its overall population plummeted by 850,000 people – to 1.4118 billion in 2022, down from 1.4126 billion a year earlier, the National Bureau of Statistics said this month.

Mothers in China had 9.56 million babies last year, and this was a 9.98 per cent drop from 10.62 million in 2021. The national birth rate fell to a record low of 6.77 births for every 1,000 people in 2022; this was down from 7.52 in 2021, marking the lowest rate since records began in 1949.

China’s population includes 31 provinces, autonomous regions and municipalities, as well as servicemen, but excludes foreigners. It does not include Hong Kong, Macau or Taiwan.

“That’s mainly a result of a drop in people’s willingness to have babies, the delay in marriage and pregnancy, as well as a fall in the number of women of childbearing age,” Kang Yi, head of the National Statistics Bureau, said at a press briefing.

He said the drop was “not something to be over-concerned about”. The supply of the country’s labour force was still greater than the demand, he added.

“The population will likely trend down from here in coming years,” noted Zhang Zhiwei, chief economist at Pinpoint Asset Management. “This is very important, with implications for potential growth and domestic demand.”

Population growth had been slowing since 2016. Although Beijing has resolved to reverse the trend and boost childbirths with many pronatalist policy support measures, both at central and local levels, they have largely failed to make a significant difference in raising people’s willingness to start families and give birth, with China’s population eventually coming to a decline last year.

Staff writers

Question prompts:

• Identify TWO population statistics revealed in Context.

• What are two possible factors that have led to the trends discussed in Context? Explain using Context and your own knowledge.

China’s population shrinks for first time in more than 60 years

Question prompts:

• List two concerns the woman in the illustration is thinking about. Use Context and your own knowledge to explain how these have contributed to a demographic crisis.

• What might the illustration suggest about the drop in China’s population?

China to introduce three-child policy as population ages

• Couples having a third child or more in Shenzhen will be eligible for a cash allowance of 19,000 yuan

• Panzhihua in Sichuan province saw an increase in the birth rate after launching the country’s first subsidies for families having more children

With China on track to record its first population decline in more than six decades, cities across the country have announced new cash incentives to encourage couples to have more children.

Couples having a third child or more in Shenzhen will be eligible for a cash allowance of 19,000 yuan (HK$22,000) per year until the child turns three years old, the city’s health commission announced early this month.

Payments for having a first and second child would be 7,500 and 11,000 yuan, respectively, until the child turned three, said the commission, which is seeking public opinion.

After relaxing its one-child policy in January 2016, China introduced a three-child policy in May 2021 in response to the country’s declining birth rate, which is expected to weigh significantly on the country’s economy in the decades ahead.

In July 2021, Panzhihua in Sichuan province became the first city in China to offer subsidies to help families raise more children – a monthly allowance of 500 yuan per second or third child up to the age of three.

Tang Zhongzhu, deputy mayor of the city, said last October that the city had spent 950,000 yuan to subsidise 650 eligible children. He estimated that more than 2,000 families would enjoy the benefits of the policy in 2022, with around 10 million yuan being paid out.

The number of births in Panzhihua had increased by 1.62 per cent compared with the year before, with the number of second children being born increasing by 5.58 per cent and the number of third children jumping by 168.4 per cent.

“The sharp increase in the birth of a third child is a result of the combined effect of the country’s implementation of the three-child policy ... and the city’s childcare subsidy policy,” Tang said. “A comparative analysis of the two-year birth population data shows that the people’s enthusiasm for childbearing in our city is encouraged by the childcare subsidy policy, and the implementation of the policy has achieved initial results.”

Staff writers

Question prompts:

• To what extent do you think handing out cash rewards can incentivise people to have more children? Explain your answer with reference to Illustration and News.

• Suggest two other possible measures that might boost the birth rate.

Your Voice: Plight of the elderly in Hong Kong and Singapore

• Demographers believe any population rebound is “hopeless”

• China must respond by shifting its development model to focus on upgrading technology and fostering talent

China’s declining population will not necessarily lead to an economic slump, though more must be done to respond to the country’s falling birth rates and take advantage of its changing demographic structure, experts say.

“There’s no hope that the decline can be reversed,” said independent demographer He Yafu, adding that one of the most urgent moves needed to encourage births was to completely scrap the family planning policy and drop all number restrictions.

“Despite the limited actual effect – as only a small number of couples would want to have more than three children – replacing the three-child policy by encouraging unlimited births would have a tone-setting significance, indicating a complete shift in birth policy.”

China’s working-age population – those between 16 and 59 years old – stood at 875.56 million at the end of 2022, down from 882.22 million a year before. Even if China’s working-age population shrinks by 200 million in the coming decades, it will still be larger than those of developed countries such as the United States, which had some 214.8 million people of working age in 2021.

“The format of China’s demographic dividend is shifting. Increasing human capital, population mobility and high-quality and effective allocation [of resources] will become the main form of the demographic dividend,” said Chen Wei, a professor with the Population Development Studies Centre at Renmin University.

“In addition, scientific and technological advancements will play an increasingly essential role in dealing with the dropping birth rate and ageing population. The explosive population growth did not bring major crises to mankind in the past; the population decline will not pose a major threat either.”

Yuan Xin, vice-president of the China Population Association, said talent acquisition and retention are also cost-effective ways to counter the demographic crisis. He added that China needs to attract highly skilled workers from other countries, rather than recruiting cheap foreign labour.

Staff writers

Question prompts:

• Using Issue and your own knowledge, identify TWO possible consequences of China’s demographic change.

• To what extent do you agree with Chen Wei that scientific and technological advancements will be key in dealing with the dropping birth rate and greying population? Explain with reference to Context, News and Issue.

Earth now has 8 billion people … and counting

Context:

• Identify TWO population statistics revealed in Context. Deaths outnumbered births in China as its overall population plummeted by 850,000 people to 1.4118 billion in 2022. The national birth rate fell to a record low of 6.77 births for every 1,000 people in 2022, down from 7.52 in 2021, marking the lowest rate since records began in 1949.

• What are two possible factors that have led to the trends discussed in Context? Explain using Context and your own knowledge. Deaths may have outnumbered births because of the coronavirus pandemic. / A drop in people’s willingness to have babies could have led to the low birth rate. / China’s former one-child policy resulted in an imbalance in the country’s gender ratio which likely contributed to a decline in marriages and births. / The high costs of having a family in China, such as living and childcare costs, could have delayed people from having children. / The delay in marriage and pregnancy amid the pandemic could have contributed to the low birth rate. (accept other reasonable answers)

Illustration:

• List two concerns the woman in the illustration is thinking about. Use Context and your own knowledge to explain how these have contributed to a demographic crisis. She is thinking about the financial burden of marriage and having children and about the uncertain future she could face since many women are expected to sacrifice their careers to take care of their families. These concerns have made many people delay marriage and pregnancy, which have contributed to the low birth rate.

• What might the illustration suggest about the drop in China’s population? Young Chinese women have a sense of apathy toward marriage given the costs of having a family and its affect on their futures.

News:

• To what extent do you think handing out cash rewards can incentivise people to have more children? Explain your answer with reference to Illustration and News. I do not agree that giving cash subsidies is effective enough to encourage people to have more children. Although the allowance can help reduce the parents’ financial burden in raising children, the amount is still not sufficient considering the high cost of living in China. It also fails to address others concerns that Chinese women may have, such as wanting to return to the workplace after giving birth. (accept any reasonable answers)

• Suggest two other possible measures that might boost the birth rate. Provide more childcare services, such as day-care centres, to reduce the caring pressure on mothers. / Give housing benefits to families with children. / Introduce family-friendly workplace policies to keep women in work, such as giving options to work from home or have more flexible hours. (accept any reasonable answers)

Issue:

• Using Issue and your own knowledge, identify TWO possible consequences of China’s demographic change. A surge in the need for healthcare and elderly services as a result of the ageing population, a labour shortage because there are fewer working-aged people might lead to an economic slump

• To what extent do you agree with Chen Wei that scientific and technological advancements will be key in dealing with the dropping birth rate and greying population? Explain with reference to Context, News and Issue. I agree to a certain extent that technology can help counter the economic slump caused by the decline in population but it cannot effectively tackle all the issues associated with an ageing population and shortage of labour. There are many jobs that machines cannot replace, such as those in healthcare. It would be more efficient for China to redesign its fertility policies to provide more support to couples, encouraging them to get married and have children.