Population Crisis in China

Population Crisis in China

Population Crisis in China

When we talk about the population growth crisis for the most populous country of the world, it sounds strange. But this is the truth.  China's birth rate dropped to a record low in 2021, data showed on Monday, extending a downward trend that led Beijing last year to begin allowing couples to have up to three children. Let's dig into numbers and check the last 10 years of baby births in China below. 

And this morning we have received the data of 2021, which states last year only 10.62 Million babies were born in China. That is the lowest level of the decades. China's one child policy has led to a break in population growth and they have realized that this is a risk. They have relaxed their one child policy and let families have children up to 3 in 2020. But this hasn't made any effect on birth rates. The main reasons are the changing population mindset and the high cost of living in China. Why does it matter and is it so important? Yes, this is really important because consumption is all related to population. Just imagine you have money and will invest in a country. Would you prefer a country whose people spend less or spend more in your product category?  Of course you will choose the one whose people spend more on your products. Once a population ages the consumption gets lower. And once the consumption gets lower, the economy doesn't grow anymore. The best example of this is Japan. The Japanese Economy was considered to surpass the US economy as they used to grow similar to China, but their population crisis happened and people preferred not to have kids. Then the slowdown in the Japanese economy started. As China doesn't want to deal with the same problem, the government is trying to encourage people with tax incentives, financial help to newborn families. Time will show us that it will work or not. But one thing is definite: there is a cost of being a developed country. The Global economies are connected to each other and a slowdown in China in the future means slowdown in Global Economies. 

 

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