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Demographic shift moves beyond old sad story

By Stuart Gietel-Basten | chinadaily.com.cn | Updated: 2026-01-21 16:00
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Another year has passed, and once again, China's demographic shifts have captured global attention. Newly released population figures confirm a familiar trend: the overall population declined and the number of births fell. A chorus of headlines suggests this demographic destiny could become China's "economic Achilles' heel".

A family pose for a photo at the Central University of Finance and Economics in Beijing. [Photo provided to China Daily]

It is a narrative we may have to get accustomed to. China, like many developed nations, is expected to experience a prolonged demographic contraction over the coming century. As the number of women of reproductive age decreases — a consequence of past declines in the fertility rate — the total number of births will also fall, even with a modest recovery in fertility rates.

So, how should we interpret these numbers? First, the declining birth rate is a stark indicator of the profound difficulties young people face in starting and growing families in contemporary China. In recent years, the government has introduced a range of policies designed to encourage childbearing and reduce the financial and opportunity costs of raising children. Local governments and employers have also rolled out supportive schemes. And with a truly holistic and joined-up approach can prove these measures sufficient.

Meeting this challenge requires a fundamental understanding of the interconnected pressures shaping young adulthood. China has been taking measures to address the intertwined issues of housing affordability, workplace culture, entrenched gender roles, the high-pressure education system and labor market discrimination. A coherent strategy that links the state, employers, families and communities is essential.

This can be coupled with efforts to lower youth unemployment, strengthen workers' rights, and help individuals meaningfully balance work, family and personal life. Only then can Chinese people envision a significant shift in fertility intentions and outcomes.

Regarding the economic implications, the basic tenets of growth theory suggest that a shrinking and aging population could be a "significant drag" on the economy. Yet, a multidimensional perspective offers grounds for optimism, or at least less pessimism. The concept of "demographic metabolism" teaches us that while populations may age and shrink, they can also become more skilled, educated, healthier and digitally literate.

The key lies in policy.

The goal can be to fully harness the potential of a smaller, older population characterized by higher levels of human capital. This requires translating improved education and health into higher productivity and an inclusive labor market that values individuals regardless of age, gender or disability. It calls for proactive "active aging" initiatives, strategic investment in the "silver economy", and an economic pivot toward this new demographic reality. Simultaneously, we must support younger generations in navigating the modern labor market and achieving their aspirations.

Critically, we must harness new technologies, including artificial intelligence, to boost productivity and supercharge the impact of this enhanced human capital within a smaller workforce.

In conclusion, China's demographic change is indeed likely to be one of population decline and rapid aging. Yet, this need not automatically translate into a predetermined economic or social destiny. Instead, these latest figures and long-term forecasts can serve as a powerful call to action for all stakeholders. The path forward is dual. First, China should address the root causes of very low fertility with comprehensive and empathetic policies that support young people and families to fulfill their aspirations in work, family and leisure. Second, and with equal vigor, it can actively adapt to the new demographic paradigm, ensuring that the full potential of every individual is not only recognized but fully realized. Our future prosperity depends not on reversing inevitable trends, but on intelligently and proactively navigating them.

The author is a professor of social science and public policy and faculty associate of the Institute of Emerging Market Studies at the Hong Kong University of Science and Technology.
The views don’t necessarily reflect those of China Daily.

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