Xi's third term starts off badly amid a declining population and weak economic growth
The population drops by 850,000 with India set to become number one. In 2022, the GDP grew by only 3 per cent, the second-worst performance since 1976. With an ageing population, the economic forecast is not rosy. Beijing will have to review its global action. Covid’s impact still needs to be assessed to see any economic uptake.
Beijing (AsiaNews) – Xi Jinping's third term in power is off to a bad start; for the first time in more than 60 years the population is falling, while in 2022 the economy grew by only 3 per cent, the second-worst performance since 1976.
According to the National Bureau of Statistics (NBS), China's population fell by 850,000 to 1.41 billion last year, with India set to overtake it. This is the first decline since 1961, the last year of the "Great Famine".
UN experts expect China’s population to shrink by 109 million by 2050. The end of the one-child policy in 2015 did not reverse the demographic trend, with grim implications for the country’s communist leaders.
As the active workforce shrinks without any productivity gains, the decline implies an ageing population and consequent slowdown in the economy.
Public finances will continue to deteriorate (China's debt is already high) with less tax revenue and higher social and health spending.
Trying to allay fears, NBS boss Kang Yi dismissed any talk of a demographic crisis since the supply of labour still exceeds the demand.
However, in 2021, Deputy Minister for Human Resources and Social Security You Jun warned that the country would lose some 35 million adults in working age by 2025.
Chinese analysts note that the demographic and economic picture will force the government to review its policies, including foreign and defence.
As several US strategists suggest, the United States must take a long view to challenge China’s geopolitical rise with time not playing in Beijing's favour since, without a strong economic base, a country cannot be proactive internationally.
China’s rivals should not see this as a victory, As demographer Yi Fuxian noted speaking to Reuters, a downturn in manufacturing in China due to a labour shortage risks pushing up inflation in the rest of the world.
This year, the world economy is likely to slide into recession. To restart global growth, many are betting on China’s decision to lift restrictions after three years fighting Covid.
Observers note, however, that the true impact of the current pandemic wave in the country still needs to be assessed, especially since little data is available.
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