• BLOOMBERG, REUTERS

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China posted its slowest population growth since the 1950s, sharply reducing the size of the labor force as the nation ages, and worsening demographic pressures in the economy.

There were 1.412 billion people in China last year, the National Bureau of Statistics (NBS) said Tuesday in Beijing in its once-a-decade census report, slightly lower than a 2017 forecast of 1.42 billion. The annual average growth of 0.53% in the past decade was the slowest since 1953.

China’s population growth has been slowing for decades as a combination of rising incomes and a restrictive one-child policy reduced births in the world’s most populous nation. The possibility of a declining population in coming years — the first time since the early 1960s — would mark a key milestone for the country and have broad implications for economic growth prospects and government finances.

The share of the working-age population — those between ages of 15 and 59 — slumped to 63.4% in 2020, or 894.4 million people, from more than 70%, or 939.6 million, a decade ago, according to the census. Residents aged 60 and above accounted for 18.7% of the population in 2020, up from 13.3% in 2010.

China added 230 million urban residents in the past decade, with 63.9% of the population living in cities last year, up from 49.7% in 2010. That puts the country on track to meet the target of making 65% of the population urban residents by 2025.

Many major economies saw births slump last year during the pandemic as economic and social dislocation undercut people’s desire to have children, and even China’s success in containing COVID-19 relatively quickly didn’t help the country arrest the decline.

The NBS said there were 12 million babies born in 2020, down from a previously reported 14.65 million in 2019. The fertility rate of 1.3 last year was lower than an earlier target of 1.8.

In the last census released in 2011, China was declaring victory over rapid population growth, partly as a result of the government’s one child policy. Beijing relaxed that program in 2015 in the hope of reviving the birth rate, but the change has had little impact, with experts citing the rising costs of raising a child as the main barrier to larger families.

People walk near the Bund, as Shanghai's Lujiazui financial district is seen in the background, on Monday. China on Tuesday announced its slowest population growth since the 1950s, sharply reducing the size of the labor force as the nation ages, and worsening demographic pressures in the economy. | REUTERS
People walk near the Bund, as Shanghai’s Lujiazui financial district is seen in the background, on Monday. China on Tuesday announced its slowest population growth since the 1950s, sharply reducing the size of the labor force as the nation ages, and worsening demographic pressures in the economy. | REUTERS

Urban couples, particularly those born after 1990, value their independence and careers more than raising a family despite parental pressure to have children.

Surging living costs in China’s big cities, a huge source of babies due to their large populations, have also deterred couples from having children.

According to a 2005 report by a state think tank, it cost 490,000 yuan ($74,838) for an ordinary family in China to raise a kid. By 2020, local media reported that the cost had risen to as high as 1.99 million yuan — four times the 2005 number.

“Having a kid is a devastating blow to career development for women at my age,” said Annie Zhang, a 26 year-old insurance professional in Shanghai who got married in April last year.

“Secondly, the cost of raising a kid is outrageous (in Shanghai),” she said, in comments made before the 2020 census was published. “You bid goodbye to freedom immediately after giving birth.”

Elsewhere in East Asia, populations have already begun shrinking. South Korea, which has the world’s lowest birth rates, had 11% fewer births last year and saw its population drop for the first time ever. It was the same in Taiwan, whose population contracted several years earlier than the official models had predicted.

Japan’s population has been shrinking since 2011, and the 870,000 or so children born last year was the lowest number since records begin in 1898. Even the U.S., which has one of the fastest population growth rates among developed nations, saw it’s population grow at the slowest pace since the 1930s, as both births and immigration slowed.

To ensure economic growth doesn’t slow in line with the population drag, Beijing will need to undertake a challenging shift in its growth model, rapidly increasing spending for the elderly while maintaining a high-level of corporate and state investment in order to upgrade its vast industrial sector.

China’s retirement age is one of the lowest in the world, and the current five-year plan calls for it to be raised “in a phased manner,” although a previous effort to do so was canceled due to a public backlash. Any such increase would take place gradually over a number of years instead of in a drastic one-time change, a government researcher wrote in March.

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