China's Population Decline Raises Economic Concerns

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China's population has decreased for the third consecutive year, highlighting significant demographic challenges for the country. As of the end of 2024, China's population stood at 1.408 billion, marking a decline of 1.39 million people from the previous year. This trend is compounded by the dual issues of an aging population and a shrinking workforce.

The declining birth rates are attributed to rising living costs, which have led many young individuals to delay marriage and childbirth. While life expectancy is increasing, it is not sufficient to offset the declining number of births. Countries with strict immigration policies, such as China, face unique risks from these trends.

China's historical context illustrates a shift from rapid population growth, especially following World War II, to significant demographic challenges today. The implementation of the “one child policy” in the late 20th century has left a lasting impact on the population's composition, resulting in an imbalance in the sex ratio and fewer births.

Currently, more than 22% of the Chinese population is over 60, and this figure is projected to exceed 30% by 2035. The government's attempts to incentivize childbirth through cash bonuses and housing assistance have yielded limited success. Concurrently, urban migration continues, with 10 million more people moving to cities in the past year, raising the urbanization rate to 67%.

As these demographic shifts unfold, China's economy faces increasing pressures, with concerns that the nation may "grow old before it grows rich."

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