China's population to shrink for first time since Great Famine 60 years ago: What does it mean for India and the world?

China's population is about to shrink for the first time since the great famine hit the nation 60 years ago. China’s population reported a record low increase of just 480,000 in 2021, as per China’s National Bureau of Statistics. 

China's population grew from 1.41212 billion to just 1.41260 billion in 2021, which is a mere fraction of the annual growth of eight million that was so common almost a decade ago. This year, China's population is on track to shrink for the first time since the great famine in 1959-61. 

A decrease in China's population means a shrinking of the world's population, as China accounts for almost one-sixth of the world's population. This comes after a record increase in population in the last four decades, in which China's population went up from 660 million to 1.4 billion. 

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What is the reason behind China's shrinking population?

• Despite China's decision to abandon its one-child policy in 2016 and introducing a three-child policy, the country's population has been shrinking. Chinese parents have been reluctant to have children amid growing inflation and other costs. The latest strict anti-COVID measures have also contributed to a slowdown in the number of new births in the country. 
• China’s total fertility rate, which is births per woman, was 2.6 in the late 1980s, well above the needed 2.1 to replace deaths. However, it fell to 1.6 and 1.7 after 1994 and further slipped to 1.3 in 2020 and 1.15 in 2021. China's fertility rate is expected to slip further from 1.15 to 1.1 between now and 2030 and remain the same till 2100. 
• In comparison, Australia and the United States have a total fertility rate of 1.6 births per woman and Japan has a fertility rate of 1.3.

Why are Chinese women reluctant to have children despite state incentives?

Chinese women are reluctant to have children despite various state incentives including tax relaxations due to multiple reasons. Some of the most reasons include the rising cost of living and increase in marriageable age that delays births and another being used to smaller families. 

China also has fewer women of child-bearing age than might be expected. China's one-child policy led many couples to opt for a boy, raising sex at birth ratio from 106 boys to 120 and 130 for every 100 girls. 

What does this mean for India and the world?

• The rapid decline in China's population is expected to have a massive impact on China's economy. China’s working-age population, which peaked in 2014, is projected to shrink to less than one-third of that peak by 2100.
• China’s elderly population, those aged 65 years and above, is expected to continue to rise and surpass China’s working-age population by 2080.
• This means that China will have more older people and much less younger people by 2100. While there are currently 100 working-age people to support every 20 elderly people, by 2100, 100 working-age people will have to support almost 120 elderly people in China. 
• The annual average decline of 1.73 percent in China’s working-age population will lead to much lower economic growth, unless productivity advances rapidly.
• This also means that soon China will be required to direct more of its productive resources to the provision of medical services to meet the requirements of the increasing elderly population.
• This would also mean higher labour costs amid rapidly shrinking labour force and result in pushing labour-intensive manufacturing out of China to other labor-abundant countries such as India, Bangladesh and Vietnam. At present itself the manufacturing labour costs in China are twice as high as in Vietnam.
• The resource exporting nations such as Australia would need to look for manufacturers outside China. For major goods importers like the United States, the sources of goods will have to shift to new and emerging centres of manufacturing.
• The shrinking in China's working-age population is expected to shift influence to other nations including India, which has one of the youngest populations in the world. India's population is also expected to overtake China within this coming decade.

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