Reimagining Chinese Economic Growth: China’s Upcoming Demographic Crisis

Photo via Mark Schiefelbein, AP


Chinese-American relations were drastically altered following China’s usurping of Japan’s position as the second-largest economy in 2010. In recent years, Chinese military transgressions forced the United States government to view this change as an economic and diplomatic threat. This designation goes beyond party lines, with Republicans and Democrats both acknowledging China’s threat to the United States’ position on the international stage. 

China has cemented itself as the United States’ primary economic adversary, with politicians warning about the imminent Chinese economic threat due to its rapid growth. In fact, China is encroaching on the U.S.’ historic dominance on nearly every metric except GDP per capita, though experts are disputing whether or not China’s GDP will surpass America’s in the near future. While there is a consensus that the figures espoused by the CCP are often inaccurate and self-reported, U.S. officials are still pushing the narrative that China’s growth and potential for dominance is a threat to U.S. economic growth. 

Following the COVID-19 pandemic and China’s strict lockdowns, re-examining China’s economic data is essential to understanding the country’s current and future state. As of right now, the Chinese economy is restructuring, with the central bank rapidly decreasing interest rates to incentivize lending following a period of decreased exports. Instead of accurate economic figures, economists must take an unorthodox approach to measuring Chinese progress. However, one element is grossly underreported when examining China’s future: China’s population crisis.

China’s population is often associated with China’s rapid economic growth; historically, by mobilizing its large workforce, China was able to outcompete and gain dominance in the global manufacturing market. In addition, population demographics are often pushed aside compared to other metrics directly correlating with a country’s economic performance. However, China faces an unprecedented demographic crisis that will curtail economic growth within the next decade.

A quick examination of China’s population by age makes one fact inevitably clear: China’s one-child policy has drastically warped the demographics of the Chinese population. The one-child policy began in 1980 as a series of measures meant to limit families to only one child. However, the bulge in population in the early 1980s was caused by the widespread exceptions to this policy; only around 35.4% of the population were forced to have one child. This policy was later repealed and followed by a rapid population decline in the mid-1990s.   

Within the next three decades, a small minority of workers must ultimately support an ever-growing class of elderly citizens. China’s enormous working class will eventually grow into an enormous elderly population, with the vast majority of state resources focused on maintaining their comfort and well-being. 

The one-child policy’s removal did little to stop the inevitable decline of the population. The Chinese birth rate continues to drop, reaching an average all-time low of 1.09 births per woman. Most populations require an average birth rate of around 2.1 to sustain their population. This fact explains why China, in 2022, faced its first-ever drop in population in the last six decades of its history. Compounding on this issue, China faces another crisis in the form of an underemployed youth, reaching an all-time high with an unemployment rate of 21.3%.

After the one-child policy was repealed, policies that gradually increased the number of children citizens have appeared ineffective. In addition, alternatives such as increasing immigration are unfeasible due to China’s low GDP per capita, forcing workers out of the country faster than new workers are coming in. Due to these conditions, China has focused on incentivizing women to have children through increased tax credits

The COVID-19 pandemic and China’s response have permanently changed China’s future as an economic power. Ultimately, re-evaluating China’s economic state is key to understanding its future on the international stage. In this re-evaluation, however, it is imperative not to take Chinese economic data at face value, but rather to use unorthodox approaches to provide a multi-faceted understanding of the Chinese economy and its health.


This article was edited by Danielle Barber.