China’s population turn: The start of long-term decline?

In January, China’s National Bureau of Statistics reported a population decline of 3.39 million to 1.40489 billion in 2025, marking the fourth consecutive year in decline. In the same year, births fell sharply from 9.54 million in 2024 to 7.92 million in 2025 — a modern-era low and a single-year contraction of over 16%, rarely seen in peacetime — reaching levels not seen since 1949 and comparable to the Qing dynasty in 1738. China’s total fertility rate (TFR) now stands at around 0.97, below the replacement threshold of 2.1, while 23% of the population is aged 60 or above. 

These trends signal a historic demographic turning point, raising concerns about economic growth, fiscal sustainability and national power — but population decline does not automatically equal crisis.

Far from a sudden shock, this fertility collapse reflects the delayed structural consequences of four decades of state-led population control and inaccurate statistics. The one-child policy (1979-2016) reshaped reproductive norms, family structures and gendered care arrangements, producing a low-fertility equilibrium resistant to policy reversal. 

Official projections long assumed recovery lay decades ahead. In 2007, the National Population and Family Planning Commission predicted a population peak of 1.5 billion in 2033. Optimism persisted: in 2013, demographers writing in People’s Daily forecast that a universal two-child policy could lift fertility above replacement, with annual births approaching 50 million. Policymakers initially adopted a cautious “selective two-child” policy in 2014, followed by a universal two-child policy in 2016. In the same year (2016), experts forecasted that the universal two-child policy could drive TFR to a peak of 2.09 by 2018.

Reality diverged sharply. In 2018, births totalled 13.62 million (TFR of 1.4). The population peak arrived 12 years early in 2021 and at least 100 million below expectations. In that year, the government even went a step further by permitting couples to have up to three children. But structural factors — rising education, delayed marriage, high housing and childcare costs, skewed sex ratios, and entrenched gendered care burdens — have further entrenched low fertility. 

The Chinese central authorities’ successive pro-natalist measures (like tax incentives and extended maternity leave) have so far produced limited results, suggesting social and behavioural constraints now outweigh policy signals.

China’s demographic trajectory stands out in Asia. While Japan’s TFR fell gradually from 1.45 in 2015 to 1.15 in 2024, and South Korea, Taiwan and Hong Kong Special Administrative Region followed smoother declines, China has experienced a far sharper reversal. This collapse coincides with rapid ageing, producing a compressed demographic transition at lower income levels than most advanced economies historically experienced.

A shrinking, ageing workforce is expected to constrain growth, particularly in labour-intensive sectors like manufacturing, services and elder care. Rising pension and healthcare obligations could reduce the tax base, worsen fiscal pressure on already-strained local governments and accelerate industrial restructuring. Meanwhile, a small number of younger generations may also dampen entrepreneurship, reduce consumption and innovation, reinforcing long-term concerns about economic dynamism and intergenerational inequality.

The institutional consequences are already visible. School-age populations are projected to fall by up to 25% between 2021 and 2035. Preschool and primary school enrolment has slumped in many regions, driving closures and teacher layoffs. Meanwhile, demand for secondary and tertiary education continues to rise, exposing significant challenges in staffing, class sizes and a declining number of schools. 

Analysts have issued stark warnings. Chinese demographer Yi Fuxian argues that sustained ultra-low fertility could trigger “civilisational collapse”, affecting economic national performance, socioeconomic development capacity and global influence. Likewise, Professor Mu Guangzong from the Institute of Population Research, Beijing University, describes an “ultra-low fertility trap” (超低生育率陷阱), producing a “painful society” of weakened family structures, shrinking kin networks and heightened vulnerability. 

The flipside to this is that a smaller population could also present opportunities. In a recent response to a Financial Times editorial, Lex Rieffel, formerly of Brookings and the US government suggests stabilising around one billion people by 2100 could allow higher per capita investment in education, healthcare and social services. Projections from the United Nations show China’s population may fall from 1.4 billion in 2024 to 1.31 billion by 2050 and below 800 million by 2100.  

Economic prosperity depends far more on productivity and efficient resource allocation than on sheer population size. As some studies observe, smaller populations can yield net benefits for environmental integrity and individual prosperity by reducing resource competition and enabling better allocation of services. In this light,a smaller Chinese population could enable higher per-capita investment in education, healthcare and social services, as well as alleviate resource, environmental and urban pressures. Amid the fourth industrial revolution, stronger human capital and human capital and technology could lead to sustained prosperity and enhanced global influence for China. 

Ageing populations also unlock new economic opportunities via the “silver economy” (银发经济), including digital health platforms, assistive technologies, smart housing and age-friendly services. Doing so could create jobs, help offset labour shortages in traditional areas, turning demographic challenges into drivers of growth.

Some Chinese scholars also see opportunities in China’s demographic and population changes. Economist Li Tie (李铁) highlights longer, healthier lifespans, innovation in elder services and the potential to shift resources toward higher-value sectors; Yang Fan (杨凡) of Renmin University and Yuan Xin (原新) of Nankai University stress that low fertility can accelerate human-capital-intensive production and institutional adaptation with proactive planning. 

The vision of a “smaller but better” China relies on demanding conditions: sustained productivity growth, restructured welfare systems to manage rapid ageing and more flexible labour markets, all requiring deep institutional reform. 

But progress is uneven. Technological upgrading has been significant, but productivity growth has slowed. Social spending remains fragmented, shaped by hukou status and regional disparities, while entrenched gender norms and care burdens continue to suppress female labour participation, limiting one of the most effective buffers against ageing.

China’s economic rise was powered by a large cohort of young workers — the demographic dividend. Since 2012, the labour force has shrunk and growth slowed from double digits to around five percent. The median age has risen from a little over 20 in 1980 to around 40 today and is projected to reach 59 by 2050, while the worker-to-elderly ratio will fall from roughly four-to-one at present to two-to-four by 2035 and one-to-five by 2050, placing increasing strain on healthcare and public finances.

By the early 2030s, China’s population is projected to be older than that of the US across all major demographic indicators, undermining assumptions that economic convergence will naturally translate into strategic parity. While per-capita prosperity matters, aggregate scale remains decisive for geoeconomic weight, military capacity, market size and diplomatic leverage. A smaller and rapidly ageing population could constrain China’s growth potential alongside its ability to sustain and project power over time.

Demographic constraints are already reshaping the global distribution of economic power. India, despite persistent development challenges, has overtaken Japan to become the world’s fourth-largest economy and is likely to rank third within a few years. By 2050, India’s median age will be around 39, compared with 43 in the US and 59 in China — an age structure that favours labour force expansion, consumption growth, and long-term geoeconomic momentum.

Historical comparison reinforces the strategic stakes. Japan reached 73% of US gross domestic product (GDP) in 1995, yet ageing and sustained low fertility gradually eroded its relative economic weight to around 14-18% today, with clear consequences for geopolitical influence. 

China’s rise — from roughly 7% of US GDP in 1990 to 71% in 2021 — now confronts similar demographic headwinds, suggesting that convergence with the US may stall or even reverse.

China’s demographic reversal does imply inevitable decline. Yet it does indicate the end of the growth and power model built on (human) labour abundance. How constraining ageing becomes will depend on interacting variables — notably productivity gains, institutional reform, and the extent to which technologies such as artificial intelligence and automation can compensate for workforce shrinkage and rising dependency burdens. 

Demography may not be destiny. But it is a powerful cumulative constraint within broader technological, geoeconomic, and geopolitical competition, shaping both China’s growth trajectory and the ways national power is generated, projected and sustained over time.

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