China's Population Is Falling. It Can Still Decline and Prosper

Earlier this week, the National Bureau of Statistics in China announced that the Chinese population has decreased for the first time in 60 years. The population decrease does not come as a complete surprise. Curbing population growth was the entire point of the One Child Policy in effect between 1980 and 2015, and women in China have been having fewer babies than needed to sustain the population since the early 1990s. But even before the One Child policy, fertility in China had been on a downward trend. Fertility dropped from over six to just three children per woman in just the 11 years between 1967 and 1978. And aside from a slight uptick in the years immediately after the end of the One Child policy, fertility has continued to decrease since 2017. According to various estimates, the total fertility rate in China now stands at just over one child per woman.

Many people see China’s low fertility and declining population as a threat to its economic prosperity, assuming that the labor force will shrink at the same time that social security costs and the number of older dependents will explode as the population gets older. Such alarmist reactions are typical in the discourse about low fertility and population aging. But while low fertility and population aging certainly pose a number of challenges, they need not spell demise.

It is unlikely that fertility in China will increase substantially in the years to come. Once low fertility has become the norm in one generation, it is much less likely to increase again in subsequent generations. We have done research on this topic and refer to this as the “low fertility trap”. Mathematically, fewer births in one generation mean fewer potential parents in the next. Moreover, people who grow up with fewer siblings and less exposure to bigger families internalize smaller families as “normal”, and hence tend to have smaller families themselves. Each generation also tends to have higher material aspirations than the last, but also needs longer to achieve the same standard of living. In China’s case, the country’s total fertility rate reached what we postulated to be the “level of no return” of 1.5 children per woman in 2019. Many men are struggling to find a female partner due to the surplus of men compared to women—largely caused by a traditional preference for sons and sex-selective abortions during the One Child policy. China’s population decline may thus accelerate in the future, as many men will remain childless.

The factors driving low fertility in China appear to be similar to the factors driving low fertility in other countries: more time spent in education and establishing a career; high costs of housing and raising a child; changes in the values and expectations surrounding sexuality, marriage and children; entrenched expectations that women should bear the brunt of domestic responsibilities; difficulties combining work and family, especially for women. In China, many people of childbearing age face the added pressure of being an only child who is expected to support their aging parents. Young people hence tend to postpone marriage and childbearing, which in turn lowers fertility, and more people explicitly decide to have fewer children or none at all. 

We know from low-fertility countries in Asia and Europe that measures designed to boost fertility—such as a one-time baby bonus, childcare subsidies or paid leave—rarely have more than a fleeting effect on birth rates because they only superficially address the factors driving low fertility. And so far, China appears to be having a similar experience: despite the implementation of the Two- and then Three-Child Policies, a number of new initiatives, and propaganda to promote childbearing, fertility has continued to fall. But even if fertility rates are unlikely to go back up, in China or elsewhere, it doesn't need to mean disaster. 

Fears about population aging are often guided by the false idea that older people are homogenously ill, dependent, and unproductive. In fact, the average health of people over 60 has improved dramatically over the past decades. And while the risk of health impairments increases with age particularly in the second half of life, most people over 60 have a high level of functioning. In 2020, just 8 percent of people in this age bracket in China reported difficulty performing activities of daily living such as getting dressed or cooking food—down from 12 percent in 2011. Improvements in educational attainment, residential environments, and healthcare accessibility were among the major factors contributing to this decline. Moreover, a shrinking labor force is less likely to threaten economic growth as new technologies are able to take over more tasks. 

Low fertility presents China not only with challenges, but also with opportunities. Low fertility and shrinking population size can reduce overcrowding and resource use, and make it more feasible to meet climate targets and reduce pollution. Low fertility makes it easier to reduce poverty, as more resources can be invested in each child born. Increased competition for labor could potentially drive an improvement in wages and working conditions. Low fertility provides women the freedom to invest their time, energy and talent in things other than childbearing, and hence help to advance the position of women in society. An older population may also contribute to less violence and crime.