ChinaMarket Insights

China’s Birth Rate Declines To Record Low

By 4 March, 2022June 30th, 2023No Comments

Chinese father holding his child

A year after allowing married couples to have up to three children, China’s birth rate is facing a continuing decline, reaching a record low in 2021.

Despite multiple efforts from the government to encourage couples to have more children, China’s birth rate dropped for the fifth year in 2021, signalling an ageing population. China’s birth rate was 7.52 births per 1,000 people in 2021, down from 8.52 in 2020 and the lowest since 1949, when the National Statistics Bureau first began collecting the data. The natural growth rate of China’s population, excluding immigration, was a mere 0.034% for 2021, the lowest since 1960. The number of births in 2021 totalled 10.62 million, compared to 12 million in 2020.

The rising cost of living and demanding work schedules are common reasons why married couples delay having children. Women are concerned that they will be further disadvantaged in their careers as companies seek to avoid the extra financial burden. Ning Jizhe, director of the National Bureau of Statistics, told state media that the decline in births stemmed from the pandemic and a decrease of “women of childbearing age, a continued decline in fertility, changes in attitudes toward childbearing and delays of marriage among young people”.

Huang Wenzheng, a demography expert with the Center for China and Globalization, said the birth numbers are likely to fluctuate in the 10 million range before declining further in the absence of more policy changes.

The Chinese government has increased their efforts to avoid such a scenario. Beijing scrapped its decades-long one-child policy in 2016, replacing it with a two-child limit. In 2020, the two-child limit was lifted to replace it with a three-child allowance. Beijing also rolled out several policies which aimed to reduce the financial burden of raising children, including banning for-profit after-school tuition in 2021. More than 20 provincial or regional governments also amended their family planning laws, including extending maternity leave for women.

The moves were to tackle the demographic situation that could hinder economic growth. The falling birthrate, coupled with an increased life expectancy over the last four decades, would lead to a decline in the number of people of working age, relative to the number of elderly who are too old to participate in the workforce. The possibility of having too few workers supporting a growing number of elderly people could cause labour shortages and overwhelm the state’s capacity to provide pensions. The eventual result would be intensified pressure on China’s economic growth.

The percentage of people ages 16 to 59, the official working-age population has fallen to 882.2 million, or 62.5% of the total population, from 63.3% in 2020.  That is a 70.1% decrease from a decade ago. Experts say the working-age share of the population might fall to 50% by 2050.

Read more about our consulting services.

    Ready to talk to our experts?

    The insights provided in this article are for general informational purposes only and do not constitute financial advice. We do not warrant the reliability, suitability, or correctness of the content. Readers are advised to conduct independent research and consult with a qualified financial advisor before making any investment decisions. Investing in financial markets carries risks, including the risk of loss of principal. Past performance does not guarantee future results.

    The views expressed herein are those of the author(s) and do not necessarily reflect the company's official policy. We disclaim any liability for any loss or damage arising from the use of or reliance on this article or its content. ARC Group relies on reliable sources, data, and individuals for its analysis, but accuracy cannot be guaranteed. Forward-looking information is based on subjective judgments about the future and should be used cautiously. We cannot guarantee the fulfillment of forecasts and forward-looking estimates. Any investment decisions based on our information should be independently made by the investor.

    Readers are encouraged to assess their financial situation, risk tolerance, and investment objectives before making any financial decisions, seeking professional advice as needed.