Population Threat – The Decrease in China’s Population
As if things couldn’t get worse for China, two vital pieces of data sealed what looks to be a grim future for the world’s second most powerful country. Currently, China is having to cope with one of the largest surges of COVID-19, with recent numbers showing 60,000 deaths because of the virus. Navigating the economic and social aspects of their “zero-COVID” decision has been a tough but manageable task, but China now has decisions to make regarding their future.
For the first time since 1961, China reported a decrease in population in what is simply one of the first parts of a long demographic shift that is set to occur. Population dropped by 850,000 inhabitants as India is set to become the most populous country in the world, and this comes after China reported their second slowest yearly growth rate since 1976. This is a clear result of the one-child policies China instituted until 2015, which severely decreased birth rates, and it could cause a dent in the Chinese economy that President Xi will have to tackle. Although it seems far off, the UN estimates China’s population to fall below 800 million by the beginning of next century, meaning it would gradually decrease on its way there. With an aging workforce, China lacks the development to tend to the elderly like their East China Sea neighbors Japan, which would cause a slowdown economically in the coming decades. Relying on youth labor for manufacturing might not work anymore, which is the powerhouse of their economy, and this could create increased dissent towards the current Chinese government. Most importantly, this hurts China in their chase for snatching the crown from the US, which is the ultimate goal.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.