HONG KONG — In a continuation of a concerning trend, China's population witnessed a decline for the second consecutive year in 2023, signaling profound long-term repercussions for the nation's economic growth potential. The National Bureau of Statistics reported a reduction of 2.08 million people, equivalent to 0.15 percent, bringing the total population to 1.409 billion. This decline surpassed the 2022 figure of 850,000, marking the first drop since 1961 during the Great Famine of the Mao Zedong era.

The dual impact of a record low birth rate and a surge in Covid-19 deaths following the easing of strict lockdowns contributed significantly to this demographic shift. A dramatic nationwide Covid surge in the early part of the year, coupled with a sudden relaxation of containment measures in December 2022, led to a 6.6 percent rise in total deaths, reaching 11.1 million. The death rate soared to its highest level since 1974 during the Cultural Revolution.

New births experienced a notable decline of 5.7 percent, totaling 9.02 million, with the birth rate hitting a historic low of 6.39 births per 1,000 people, down from 6.77 births in 2022. China's demographic challenges stem from decades of declining births, influenced by the one-child policy from 1980 to 2015 and rapid urbanization during that period. Similar to economic shifts in Japan and South Korea, where urbanization made child-rearing more expensive, China faced a similar trend.

As we have observed again and again from other low fertility countries, fertility decline is often very difficult to reverse," noted University of Michigan demographer Zhou Yun. Furthermore, in 2023, challenges such as record-high youth unemployment, falling wages for white-collar workers, and a deepening crisis in the property sector further dampened the enthusiasm for childbirth.

The data underscores growing concerns about China's economic future, with fewer workers and consumers, while the escalating costs of elderly care and retirement benefits strain local governments already burdened with debt. The shift in population dynamics comes at a time when India has overtaken China as the world's most populous nation, intensifying discussions about the potential relocation of supply chains from China to other markets. As geopolitical tensions between Beijing and Washington rise, this demographic shift adds complexity to the broader economic landscape.

Looking ahead, United Nations experts anticipate a substantial decline in China's population, foreseeing a shrinkage of 109 million by 2050—a stark increase from their previous forecast in 2019. The challenges of an aging population are already evident, with 296.97 million people aged 60 and above in 2023, constituting 21.1 percent of the total population, up from 280.04 million in the previous year.

Concerns deepen as the death rate in 2023 rose to 7.87 deaths per 1,000 people, surpassing the 2022 rate of 7.37 deaths. The retirement-age population, those 60 and over, is projected to exceed 400 million by 2035—surpassing the entire population of the United States—compared to the current 280 million. The Chinese Academy of Sciences warns of the pension system running out of funds by 2035.

Mr. Zhu Guoping, a 57-year-old farmer in Gansu province, highlights the financial struggles faced by many retirees. His meager annual income of around 20,000 yuan leaves little room for savings, and the anticipated 160 yuan monthly pension upon turning 60 seems insufficient. High childcare and education costs, coupled with uncertainties in the job market, deter many couples from having children. Gender discrimination and traditional role expectations further compound the issue.

Despite various local government initiatives, including tax deductions, extended maternity leave, and housing subsidies, the impact has been limited due to funding constraints and a lack of motivation. Calls for a unified nationwide family subsidy scheme have been advocated by a Beijing policy institute.

Wang Weidong, a 36-year-old Beijing resident, working at an internet company, expresses skepticism about the efficacy of incentives in encouraging childbirth. He and his wife remain hesitant about having a second child, emphasizing that incentives are auxiliary rather than the root cause. As China grapples with these demographic challenges, the complex interplay of economic, cultural, and policy factors will shape the trajectory of its population dynamics in the years to come.

In conclusion, the trajectory of China's population presents a complex landscape marked by an aging demographic, dwindling birth rates, and looming economic challenges. As United Nations experts project a substantial decline of 109 million people by 2050, the strains on the pension system and the increasing proportion of retirees signal profound long-term impacts. The challenges are multifaceted, encompassing financial struggles for the elderly, high childcare and education costs, and gender discrimination that discourages family expansion.

Despite government initiatives at the local level, the efficacy of incentives to reverse these demographic trends remains uncertain. The reluctance of couples like Wang Weidong and his wife to have a second child underscores the need to address deeper-rooted issues beyond superficial policy measures. The proposed unified nationwide family subsidy scheme stands as a potential solution, but its successful implementation requires overcoming funding constraints and bureaucratic hurdles.

As President Xi Jinping emphasizes the cultivation of a new culture of marriage and childbearing linked to national development, China faces the intricate challenge of balancing economic growth with demographic stability. The outcome will shape the nation's social and economic landscape, making it imperative for comprehensive and sustained efforts to address the multifaceted factors influencing China's population dynamics.