China’s biggest problem is not the US. It is a “virus” that advances at an unprecedented speed and threatens to empty its factories

In September, and in front to a data offered by the United Nations that put the future of the Chinese economy in check, Beijing defended itself with an opportunity for the future: the AI. In between, it remained to be seen who was right. Because the main problem of the economy that pull the strings of the planet are pure mathematics applied to a near and most uncertain future.

One that indicates that, sooner rather than later, its population will to plummet.

Against oneself. The demographic crisis that shakes China today is, to a large extent, the result of a policy that worked too well: the birth control campaign begun in the seventies and crystallized in the policy of only child 1979. What began as a state intervention to contain population growth that was considered unsustainable ended up shaping behaviors, expectations, and family structures for generations.

Sterilizations, fines and forced abortions not only birth numbers reducedbut they inhibited the cultural habit of mass reproduction, and when the State began to relax the rules (allowing two children in 2016 and three in 2021) the social response was no longer the same: the fertility rate fell from 1.77 children per woman in 2016 up to 1.12 in 2021and the timid incentive measures have barely reversed the curve.

The real cost of breeding. Behind the numbers there are everyday decisions. The economic calculation of starting a family in China is, as in so many other places, considerable: studies estimate that raising a child from birth to the end of their college education can cost on average about $75,000and in cities like Shanghai that figure shoots up to approximately $140,000. These prices, together with long work daysmarket expensive housing and professional expectations, explain why many young people (especially women) they choose not to have children.

Surveys and testimonials collected show that for many people motherhood today is equivalent to a professional and personal resignation that they are not willing to assume: “I don’t want to think about sacrificing my life,” summarizes an executive from Hangzhou in the Washington Postand that plea for time and personal autonomy is one of the reasons why symbolic subsidies from the government (for example, some 500 dollars a year for the first three years) are insufficient to reverse the trend.

Construction Worker Flickr Saad Akhtar
Construction Worker Flickr Saad Akhtar

Without weddings and solutions. we have been counting. Demographic decline is accelerated by fall of marriage: in 2024 just 6.1 million of couples registered their union, compared to 13.5 million in 2013, a data that works as predictor of future births when the rate of births outside of marriage is marginal.

The State not only offers economic incentives and university courses about “how to flirt”, but has returned to intrusive behavior: officials pressure newlyweds about your plans of pregnancy and control the conversation public about marriage in the media. It is a gesture of urgency that clashes with the autonomy of generation Z, increasingly individualisticfor which getting married and procreating are no longer social mandates but options (among many). That tension between pronatalist policy and cultural change explains why coercive measures of the past do not seem to translate into higher births today.

Accelerated aging. While fewer Chinese are born, the older population continues to grow: Life expectancy rises and the population pyramid inverts, which poses a brutal rebalancing in public accounts. Projections indicate that in the coming decades the proportion of elderly will doublewith colossal pressure on pensions, healthcare and long-term care financed by an increasingly narrow contributor base.

Demographers warn that this phenomenon can trigger a vicious circle: more resources allocated to the elderly imply less public support for young families, which further reduces fertility. By 2100, according to calculations by international organizations, there will be more people out of working life than within it, a scenario with economic and political implications of systemic scope.

China Child E1511282125863
China Child E1511282125863

The factory of the world shrinks. The problem is not only quantitative but qualitative: the workforce that made China the factory of the planet (born between 1960 and 1980, with a disposition for industrial jobs) has no substitute culture in later generations that they avoid factory work. At the same time, the proportion of Chinese manufacturing in the world total (today located around 30%) will necessarily be reduced if demographics exhaust the labor supply.

The official short-term answer is automationbetting on robots and investment in productivity, but substitution does not work the same in all sectors: services, care and certain labor-intensive branches will continue to demand humans. The consequence is that manufacturing companies already they detect competitive pressure in prices and labor costs, and some observers point out that the industrial replacement could move to India, Southeast Asia, Mexico or Eastern Europe, with a multiplier effect on global supply chains.

Politics and resistance to foreigners. They remembered in the post that a lever that in other countries would alleviate the labor force deficit (immigration) crashes in China with taboos of cultural homogeneity and political considerations that make the adoption of broad immigration policies difficult. That forces the government’s options and forces it to rely on internal incentives and in robotization.

The strain between the economic need for labor and the preference to maintain cultural cohesion places Beijing in a strategic dilemma: either it embraces broader migrations (with all the integration challenges that this would imply) or it accelerates productive reconversion and the displacement of sectors that depend less on the labor factor.

Learning The Second Falun Dafa Exercise
Learning The Second Falun Dafa Exercise

State measures. Faced with the abyss, Beijing has been introducing measures: relaxation of family policysubsidies, public campaigns for promote marriage and birth rate, and tax programs limited. But the experts they underline that late policies rarely reorder behaviors already fixed for decades.

Louise Loo and other economists they estimate that reducing the workforce could take away about 0.5 points percentages to annual GDP growth in the next decade, a bite significant for an economy that needs to grow to absorb debts and finance its modernization. The challenge is that demographics act over long periods of time: cohorts born today would begin to integrate into the labor market in twenty yearsso current policies must be sustained and coherent, not one-off patches.

Global impact. There is no doubt, the decline in Chinese production would have effects all over the world: from cost increases in consumer goods (phones, footwear, electric vehicles) to inflationary pressures due to lower manufacturing efficiency. Plus: the relative loss of industrial capacity would reduce the influence Beijing’s strategic strategy in global value chains and in critical sectors, which could reconfigure geostrategies and encourage industrial relocation accelerated by tariff policies and trade agreements.

Some analysts even add one more point and also warn about the effect on the company itself. chinese national security: an economy that is shrinking its labor base and needs more resources to care for the elderly It will see its internal and external priorities strained, with unpredictable political consequences.

A transversal problem. Ultimately, the chinese demographic crisis It is not a matter of simple birth figures, it is a structural fracture that crosses the economy, culture and politics. For analysts, reverse it (if possible) demands labor reforms, much more ambitious conciliation policies, reconsideration of the role of immigration, investments in technology with social redistribution and a fiscal strategy that redistribute loads between generations.

If you will, China now faces the most difficult phase of its modernization: not that of going from poor to industrial, but of transforming a society built over decades demographic control in another capable of sustaining its prosperity with fewer armsmore longevity and new aspirations personal. Meanwhile, time is running out: demographic policy forces us to think about half-a-century horizons, and the question that remains is whether Beijing has the political flexibility and historical patience to navigate that labyrinth. without sacrificing cohesion nor the international ambition that has guided its rise.

Image | PXHere, Saad AkhtaAlexander Müller, longtrekhome

In Xataka | China knows that its population is going to collapse but it already has a long-term plan to solve it. Of course, thanks to AI

In Xataka | While the birth rate in China plummets, a region does not stop having children. Their secret: being a large family has a reward

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