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Chinese officials revealed this week that the country’s population has declined for the first time in more than six decades. While some experts said the announcement was overdue, Chinese officials had not predicted a decrease in population for another decade.
The announcement raised some alarms around the world, notably because of the expected impact on manufacturing in China. The country is the world’s top manufacturer, accounting for more than 28 percent of the world’s total production of goods. The U.S. accounts for 16 percent of global manufacturing, the second largest in the world.
A drop in the number of births coupled with a rise in the number of deaths resulted in 850,000 fewer Chinese people living in mainland China in 2022 compared with 2021, the country’s National Bureau of Statistics announced on Tuesday. One analysis projects that the country’s population will be half its current size by the end of this century.
China’s population has not officially declined since the early 1960s, when leader Mao Zedong’s “Great Leap Forward,” which emphasized collective farming and manufacturing, led to widespread famine. Experts say it is unclear how much COVID-19 contributed to the rise in deaths in China last year.
China’s one-child policy – instituted in 1980 to slow population growth and revised in 2016 to allow families to have two children and again in 2021 to allow three children – is a major contributor to the population decline. It was also coupled with a preference for male children in many parts of the country, which contributed to a gender imbalance and fewer women who could become mothers.
Currently, many young people in China say they do not want – or can’t afford – to have children.
In addition to a population decline, China is also growing older. A quarter of the country’s population is projected to be over 60 by 2030. This means there will be fewer working-age people in China coupled with a growing demand for people to care for the country’s aging population.
Other countries, such as Japan, South Korea, Australia, Spain and Italy, have faced similar demographic challenges. They, however, are smaller than China and, in some cases, are more open to immigration.
Earlier this week, Chinese officials also announced that the country’s economic growth – 3 percent – was the second slowest since 1976.
The consequences of the population and economic decline won’t just be limited to China. With fewer workers, the cost of manufacturing in China will likely increase. That means an increase in the price of many goods, especially low-cost consumer goods and clothing, imported by the U.S. and other countries. It may also mean a smaller market for U.S. goods that are imported by China.
Some U.S. manufacturers have already said that they are looking to move some of the manufacturing now done in China to other countries, such as Vietnam and India. It would be nice if they’d move some of that manufacturing back to the U.S., even if it means some products would cost more to meet labor, safety and environmental standards.
Demographic and economic changes in Asia may seem far removed from Maine, but this week’s news from Beijing reminds us that what happens in China will have ripple effects around the world.