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Chinese demographic crisis – a result of Beijing’s policies


President Xi Jinping’s unprecedented third term seems to be a time of reckoning for the country. China is struggling to cope after its stringent Zero Covid policy was abruptly lifted following widespread public protests. Now, the national census has put forth alarming data that could likely sound the death knell for Beijing’s aggressive plans of world domination.

China’s National Bureau of Statistics stated yesterday that the country’s population stood at 1.411 billion at the end of 2022. The population count declined by 850,000 people in one year. Just 9.56 million births were recorded in the last year. At 6.77 births per 1,000 people, the data signifies a more than 10% drop from 2021.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

The last time the country’s population growth rate dropped was six decades ago. A devastating famine caused by Mao Zedong’s failed “Great Leap Forward” campaign was the culprit then. The latest dismal trend results from another one of the Chinese Communist Party’s grand schemes – the One Child policy.

Beijing rarely does anything by half measures – be that enforcing months-long Zero Covid restrictions or imposing the one-child norm. Through relentless propaganda, forced sterilizations, and abortions, the country reined in its numbers after dictating a one-child per couple rule in 1979. The policy irrevocably changed the face of Chinese society. People resorted to sex selection, hoping for a male child, skewing China’s gender ratio.

The slowing population growth is terrible news for a struggling economy. Chinese GDP growth was just 3% in 2022. That’s the worst numbers posted by the country since the 1970s, barring the first year of the COVID-19 pandemic. The world’s largest economy’s galloping growth rate may be a thing of the past.

But, the aging Chinese population will have far-reaching consequences. Rising number of seniors means the “world’s factory” will face a labor shortage. This, in turn, will push wages higher, resulting in higher production costs. A shortage of the workforce could also result in lower production.

China, much like other economies, is a consumer-driven one. A shrinking consumer base will drastically impact production and manufacturing capabilities. The vicious cycle would drive up prices of goods deemed for the domestic and export market. Countries that rely on cheap Chinese goods may find the rising prices unpalatable.

Many European countries, when faced with a similar situation, embraced an attractive immigration policy. Beijing is highly unlikely to follow suit. The Chinese Communist Party would loathe loosening its ideological control or facilitating a significant degree of cultural exchange among its citizens. Beijing will likely focus on finding technological answers like enhancing industry automation, developing robotics, and exploring artificial intelligence solutions to combat the problem.

Such initiatives may yield better results than appealing to the citizens to have more children. The One Child policy was rescinded a few years ago, in 2016. Today, the Chinese are ‘allowed’ to have three children. Beijing’s incentives to bolster the birth rate have found few takers so far. The Chinese are unwilling to shake off the one-child family setup. Many know no other kind of family, having been an only child raised by parents from one-child families! The proffered tax breaks and childcare benefits hardly offset the prohibitive cost of childcare, healthcare, and education in the country. The COVID-19 uncertainties and the shrinking economy have led many to believe that the days of glorious growth are behind them. And few are willing to expand their families for the sake of the country.

While negating the birth-death gap will take a while if ever, there is a more pressing problem that cannot be ignored. Soon, China’s elderly will depend on the shrinking productive workforce for their seniors’ pension, healthcare, and other services. Currently, the country is far from equipped to handle the demand for elder care that will kick in soon. A pension deficit is another looming possibility. With fewer workers contributing to the public pension system, there are fears that the urban state pension fund will run out of cash in less than a decade.

The shrinking workforce, a sizeable state-dependent senior population, and a slowing economy may force President Xi Jinping and his cabinet to focus on domestic policies more. What measures the Chinese Communist Party will devise and impose to reverse the unacceptable trend is the critical question. If the shift in focus will result in a less aggressive China on the world stage remains to be seen.

Related Infographic

Chinese Demographic Crisis - A Result Of Beijing’s Policies

TIPP Takes

Geopolitics And Geoeconomics

#1. Top Ukraine, U.S. Military Leaders Meet Over ‘Urgent Needs – Al Jazeera

The first face-to-face meeting between the two comes as the international community ramps up military assistance to Ukraine, including tanks and air defense systems.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

U.S. Army General Mark Milley, chairman of the Joint Chiefs of Staff, met for a couple of hours with Ukraine’s chief military officer, General Valerii Zaluzhnyi, at an undisclosed location in Poland near the border with Ukraine.

Zaluzhnyi said he outlined his forces’ “urgent needs” with Milley.

#2. Russia Proposes ‘Major Changes’ To Boost Capabilities Of Armed Forces – WION

In the wake of setbacks faced in the ongoing war, Russia has decided to make “major changes” to its military structure. Defense Minister Sergei Shoigu informed that the proposed changes to its armed forces will take place from 2023 to 2026.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

The reforms proposed include boosting the combat capabilities of its naval, aerospace, and strategic missile forces, apart from major changes to the administrative system.

“Only by strengthening the key structural components of the armed forces is it possible to guarantee the military security of the state and protect new entities and critical facilities of the Russian Federation,” Shoigu said.

Kremlin spokesman Dmitry Peskov said the proposed reforms were necessitated due to the “proxy war” conducted by the West in Ukraine.

#3. Ukraine War: Zelensky adviser resigns over Dnipro remarks – BBC

Presidential adviser Oleksiy Arestovych offered his resignation after suggesting a Russian missile that hit a building in Dnipro, killing 44 people, was shot down by Kyiv. Mr. Arestovych apologized and said he had made a “fundamental error.”

Chinese Demographic Crisis - A Result Of Beijing’s Policies

Hours after Saturday’s missile strike hit an apartment building in Dnipro, Mr. Arestovych initially said it appeared that the Russian missile had fallen on the building after Ukrainian air defenses shot it down.

The original remark caused widespread anger in the country and was used by Russian officials to blame Ukraine.

Ukraine’s President Volodymyr Zelensky has not yet commented on Mr. Arestovych’s decision to resign.

#4. Blinken To Visit China Visit On February 5-6 – AFP

The U.S. Secretary of State Antony Blinken would arrive in Beijing on February 5 and hold talks the following day, going ahead with the visit despite mounting concern about Covid-19 cases in China.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

In Beijing, Chinese foreign ministry spokesman Wang Wenbin welcomed the visit and said that he hoped Mr. Blinken would follow the path of the Xi-Biden meeting and help “push China-US relations back on the track of healthy and stable development.”

Mr. Blinken will be the first US secretary of state to visit China since October 2018, when his Republican predecessor Mike Pompeo, known for his outspoken criticism of Beijing, made a brief stop following talks with North Korean leader Kim Jong Un in Pyongyang.

#5. Taiwan To Let Women Join Reservist Trainings For First Time – AFP

Taiwan’s military announced plans to include women in its reservist training for the first time this year as the East Asian island tries to bolster its forces against threats from China.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

Taipei’s Defense Ministry said it would allow about 200 discharged female soldiers to enroll in voluntary reservist training from the second quarter of this year as part of efforts to boost the overall backup force.

Self-ruled, democratic Taiwan lives under the constant fear of a Chinese invasion, as Beijing claims Taipei as part of its territory to be taken one day by force if necessary.

China’s saber-rattling has intensified in recent years under President Xi Jinping, and Russia’s invasion of Ukraine has further deepened worries in Taiwan that Beijing might move similarly.

#6. E.U. Calls For Clean-Energy Rival To Biden’s Inflation Reduction Act – UPI

E.U. President Ursula von der Leyen said from the WEF in Davos, the bloc needs a comprehensive net-zero subsidy package to counter the green energy spending in President Biden’s Inflation Reduction Act.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

Von der Leyen’s proposed Net-Zero Industry Act calls for increased investments, a skills-based move to accelerate the pivot away from fossil fuels and fast-tracking some of the permitting processes for clean-energy technology.

Her proposal comes amid criticism that the $369 billion green subsidy package from Washington is creating an uneven playing field. The law gives U.S. consumers incentives to purchase new and second-hand electric cars, heat pumps, and electric connections to cooking, among other subsidies. Some of those incentives require a U.S.-made manufacturing base.

EU members said they feared the tax breaks created by the Inflation Reduction Act could draw business away from Europe and potentially lead to a trade war.

#7. Dutch Senate Expands Constitutional Ban On Discrimination – A.P.

The Dutch Senate approved an amendment to the country’s constitution, expanding its first article to specifically ban discrimination based on sexual orientation or disability.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

The constitution’s updated Article 1 mandates that all people in the country must be treated equally and that “discrimination based on religion, belief, political opinion, race, gender, disability, sexual orientation or on any other basis is not allowed.”

Astrid Oosenbrug, chair of the country’s COC gay rights organization, called the vote “a historic victory for the rainbow community and a crown on years of work” by the group.

#8. Private Jet Emissions To Spike During Davos Meeting – Tippinsights

Environmentalists accuse world leaders and business chiefs of hypocrisy as they fly to the World Economic Forum (WEF) on private jets to discuss, among other things, climate change.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

World leaders and business chiefs are again jetting into Davos on private planes for WEF 2023, causing another spike in emissions and leading to calls of hypocrisy as attendees discuss climate and inequality behind closed doors.

Dutch environmental consultancy firm CE Delft has calculated that during WEF 2022, CO2 emissions from private jets were four times greater than an average week – emitting the CO2 equivalent of 350,000 cars over the period.

#9. Iran’s ‘Death Committee’ President Unyielding In Defense Of Clerical Rule – Reuters

As a young prosecutor in Tehran, Ebrahim Raisi sat on a “death committee” overseeing the execution of hundreds of political prisoners in the Iranian capital, rights groups say.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

Now president three decades later and seen by many as Iran’s potential next Supreme Leader, Raisi is presiding over an uncompromising response to domestic and international challenges which have seen Iranian courts pass dozens of death sentences.

Four people have been hanged after being convicted on charges related to popular unrest that erupted in September.

The executions triggered condemnation from Europe and the US, but Raisi has insisted that “identification, trial and punishment” of all those who authorities believe were involved in violence will continue.

#10. Saudi Arabia Open To Trading In Currencies Besides The U.S. Dollar – Middle East Eye

Saudi Arabia will consider trading in currencies other than the U.S. dollar in one of the clearest signs yet that the oil-rich kingdom is open to diversifying away from the greenback.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” the kingdom’s finance minister, Mohammed al-Jadaan, said in an interview in Davos, Switzerland.

Jadaan’s comments likely spark speculation about Riyadh’s willingness to conduct oil sales in the Chinese Yuan.

During a visit to the Gulf in December, Chinese President Xi Jinping told Arab leaders that Beijing would push to buy oil and gas in yuan as it looks to position its currency for use in international trade.

Like other Gulf states, Saudi Arabia has pegged its currency to the dollar for decades.

#11. Pakistan PM Sharif Makes Conditional Talks Offer To Arch-Rival India – Reuters

Pakistan PM Shehbaz Sharif has made a conditional offer to his Indian counterpart to open talks on all outstanding issues between them, including disputed Kashmir.

Chinese Demographic Crisis - A Result Of Beijing’s Policies

He believes could be facilitated by the United Arab Emirates (UAE).

However, a statement issued by Sharif’s office after the interview aired added that such talks would only be possible if India restored the autonomous status in the part of Kashmir it rules that was revoked in 2019.

“Without India’s revocation of this step, negotiations are impossible,” it said.

New Delhi has ignored such calls from Pakistan on Kashmir’s status.

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Republished with permission from TIPP Insights

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