Opinion | China faces a daunting task in reversing the country’s declining birth rate

For China, 2022 will be remembered by future historians for many reasons. The most significant development, which is set to have a far-reaching impact on the Chinese economy, society and even the global power structure, is probably the official recognition that China’s population has started to decline.

It is a watershed moment in Chinese history and will overturn many basic assumptions used when analysing the country’s future. First of all, the population decline flies in the face of the notion that Beijing is always wise in setting long-term strategies. In retrospect, the notorious one-child policy significantly distorted China’s birth culture and accelerated the arrival of the nation’s population peak. The hugely costly and controversial policy was short-sighted in design and brutal in implementation.

It may have helped China reap “demographic dividends” during its economic rise, but looking forward, it has undermined national long-term prospects. The decline in overall population is only the tip of the iceberg when it comes to China’s demographic crisis, and the damage caused to China’s economic momentum will only be more visible in the coming decades.

For instance, one engine of China’s economic development was urbanisation, where hundreds of millions of young people left unproductive farms to join manufacturing and service jobs in cities. Shenzhen, the poster child of China’s economic rise, transformed from a fishing village to a dynamic metropolis in roughly two generations because it could attract the right people. Without the waves of domestic immigrants, Shenzhen could not have found its place in the world’s economic landscape.

For provincial Chinese governments, it is still taken for granted that they need to build more residential buildings, infrastructure, utilities and schools as part of their future development plans. But a cruel reality is that the bulk of these facilities, even if they become reality, will remain empty because there are simply not enough people to fill them.

For example, China will have 11.5 million university and college graduates in the summer of 2023, but annual births have dropped below 10 million. In other words, even if China can enroll every child born in 2022 into college or university, and the country can attract many more overseas students, some universities and colleges will struggle to recruit enough students by 2040.

For now, government policies to encourage births remain cosmetic, limited to cash rewards for couples who have their “second” or “third” child. In fact, the effectiveness of these policies is near zero. In my own random surveys, I have not met a female in her twenties or early thirties who wants to have three kids. Most of them want none, or only one child.