China, LOGIC.co.id – China is now facing an increasingly evident demographic crisis. Its population has dropped sharply by 2 million people in 2024 alone, heightening concerns about the country's economic and labor market future.
According to the latest data released by the National Bureau of Statistics in Beijing, China’s population stood at 1.408 billion by the end of 2024, down from 1.410 billion in 2023. This marks the third consecutive year of population decline, following a drop of 2.8 million in 2023 and 850,000 in 2022.
The decline is primarily driven by a persistently low birth rate that fails to offset the number of deaths. This trend ends over six decades of steady population growth in the country.
Darren Tay, Head of Asia Country Risk at BMI, warned that the shrinking population poses a serious threat to China’s long-term workforce sustainability and economic growth.
“A declining population will directly affect national productivity, especially if not matched with significant labor reforms,” he said.
Research firm the Economist Intelligence Unit (EIU) projects that China’s population will continue to shrink drastically, falling to 1.317 billion by 2050 and potentially plummeting further to around 732 million by 2100.
EIU senior economist Tianchen Xu added that China’s fertility rate is declining at a much faster pace than other East Asian countries like Japan and South Korea.
One major reason is the high cost of raising children in a developed nation like China—particularly in terms of education and skill development.
“As the economy grows, the demand for competent human resources increases. As a result, family investments in child-rearing rise, leading many to opt out of having children altogether,” Tay explained in a quote from AFP, Saturday (May 10, 2025).
Meanwhile, China is also grappling with fiscal challenges caused by a growing elderly and retired population. This surge is expected to put significant pressure on the pension system and the national budget.
An EIU report noted that raising the retirement age to 65 by 2035 could help reduce the pension budget deficit by up to 20%, while also increasing citizens’ net pension benefits by around 30%.
Such a move is believed to ease financial burdens on both the government and households, while also extending the productive lifespan of the working-age population.
However, without serious interventions and long-term strategies, this demographic crisis is feared to undermine China's future economic competitiveness.