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China’s population continued to shrink for the third consecutive year in 2024, marking a significant turning point for the nation that has seen more than six decades of growth. With a rapidly ageing population and persistently low birth rates, this downward trend raises serious concerns for China’s economic future, which has long relied on a vast and youthful workforce to drive growth.
The Population Decline
According to China’s National Bureau of Statistics, the population at the end of 2024 stood at 1.408 billion, slightly down from 1.410 billion in 2023. While the decline was less steep than the previous year, when the population had fallen by a larger margin, the trend marks a continuation of a broader demographic shift that experts warn could have significant implications for the country’s economy and social systems.
China’s population growth had been a hallmark of its economic ascent, but with the country now facing the challenges of an ageing population and fewer births, this growth is increasingly in the rearview mirror.
The End of the One-Child Policy
In an effort to address the declining birth rate, China ended its strict “one-child policy” in 2016, which had been introduced in the 1980s to curb population growth due to concerns over overpopulation. In 2021, the government further relaxed its stance, allowing couples to have up to three children. Despite these changes, the birth rate has remained stubbornly low, failing to reverse the demographic decline.
A key factor in the ongoing decrease in births is the rising cost of living, particularly in urban areas, which has made raising children more financially burdensome for many families. Additionally, more women are choosing to delay or forgo having children in favor of pursuing higher education and building careers, further contributing to the demographic slowdown.
The Ageing Population Crisis
China’s demographic shift is also driven by an increasingly ageing population. Data released on Friday showed that the number of people aged 60 and above reached 310.31 million by the end of 2024, accounting for nearly 25% of the total population. This represents a significant increase from the 297 million people aged 60 and over recorded in 2023.
By 2035, experts predict that nearly a third of China’s population will be over the age of 60, a trend that poses substantial challenges for the country’s social services, healthcare, and pension systems. With fewer working-age people to support an expanding elderly population, China faces a potential crisis in funding its public health and retirement systems.
Raising the Retirement Age: A Step Toward Adjusting to Demographic Realities
In response to the growing challenges posed by an ageing population, Chinese officials announced in September that they would gradually raise the country’s statutory retirement age. The new policy, which took effect on January 1, aims to keep older workers in the labor force for longer, thereby alleviating some of the pressure on the pension system.
This move is especially important considering that China’s current retirement age was set decades ago, at a time when the country faced widespread poverty and scarcity. Since then, China has undergone dramatic economic transformations, with rapid improvements in living standards, health, and nutrition. However, these gains have also led to an ageing population that is now placing immense strain on the economy and social infrastructure.
The Economic Impact: A Slowing Growth Outlook
As the world’s second-largest economy, China has experienced tremendous growth over the past few decades. However, with an ageing population and a shrinking workforce, the country now faces the dual challenges of slower economic growth and an increased burden on its social systems. The impact of the population decline on economic output, labor productivity, and consumer demand could be profound, leading to longer-term economic stagnation if these issues are not addressed effectively.
Additionally, the demographic shift could impact China’s global competitiveness. As the workforce shrinks and wages rise, China may find it harder to maintain its position as the world’s factory, potentially leading to shifts in global supply chains and trade dynamics.
Government Measures and the Path Forward
To combat these demographic challenges, the Chinese government has implemented various measures to support families, including financial incentives for childbearing, expanded parental leave policies, and efforts to make housing more affordable. Despite these measures, however, it remains unclear whether they will be sufficient to reverse the population decline.
The situation is compounded by a complex set of societal changes, including shifting attitudes toward family life, greater access to education and employment for women, and evolving cultural norms. Addressing these issues will require significant policy adjustments and long-term planning to ensure that China’s demographic and economic challenges do not become insurmountable.
