China’s birth rate decline and economic growth slump in 2019 present new challenges after trade war deal
- Gross domestic product (GDP) growth was 6.1 per cent in 2019, a year in which the Chinese economy was hammered by US tariffs
- Some 14.65 million babies were born in China in 2019, down from 15.23 million in 2018, and the lowest number since 1961
Gross domestic product (GDP) growth was 6.1 per cent in 2019, a year in which the Chinese economy was hammered by US tariffs. After months of negotiations and escalating duties on each other’s goods, China and the United States agreed on Wednesday to put the brakes on an 18-month trade war that has disrupted global supply chains and shaken markets.
Some 14.65 million babies were born in China last year, down from 15.23 million in 2018, and the lowest number since 1961, according to data from the National Bureau of Statistics (NBS) released on Friday. The birth rate fell to 10.48 per thousand, the lowest level since at least 1949 when the Communist Party took power.
China’s overall population continued to grow, rising to 1.4 billion at the end of the year from 1.39 billion a year earlier. The number of working age people – between 16 and 59 years old – was 896.4 million, accounting for 64 per cent of the total population, a decrease of 890,000 on 2018.
The slowing birth rate will add to demographic concerns among policymakers in China, where the population is greying rapidly due to decades of rigid birth controls. Authorities only abandoned the controversial one-child policy in 2016 to allow couples to have two children, but it has failed to boost births. The number of babies rose briefly to 17.86 million in 2016, but has fallen every year since.
Experts have criticised the government for being too slow to unpick the one-child policy, causing a slump in births that has been exacerbated by a decline in the number of women of child-bearing age, between 15 and 49.
The latest population figures will have implications for future economic growth and China’s ability to support its ageing population. Fewer births mean fewer wage earners and fewer consumers.
At a press conference in Beijing on Friday morning, Ning Jizhe, an NBS spokesman, focused on the fact that China’s per capita income rose above US$10,000 last year for the first time in history, claiming that “China’s pace of progress is unstoppable”.
“It showed that the quality of China’s economic development is improving,” Ning said.
But some analysts have struck a more sceptical tone, even as Chinese policymakers stepped up efforts to curb a prolonged economic downturn last year by using tax cuts and monetary stimulus.
While policymakers in Beijing will be relieved to have kept last year’s official growth rate between the target of 6.0 per cent and 6.5 per cent set at the beginning of 2018, more challenges await this year.
“The phase one deal is only an interim agreement between China and the US. In fact, to push for negotiation in the next stage, the US will keep existing tariffs on imports from China unless the two countries manage to reach a phase two deal,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis.
“In the bilateral evaluation and dispute resolution chapter, the agreement also makes it clear that, if the concerns cannot be resolved, the two parties hold the right to suspend an obligation, adopt a remedial measure, or in the worst case, withdraw from the agreement.”