Population Drop Reshapes China's Economy, Society

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May 19, 2025 162

In recent years, the debate surrounding China's declining population has intensified, capturing the attention of both economists and social scientists. Concerns abound regarding the potential repercussions, such as labor shortages, economic slowdown, and social unrest. However, if we delve deeper into this issue, it becomes clear that population decline might not be the disaster it is often portrayed to be. Instead, it could serve as an opportunity to optimize both social and economic structures. The traditional reliance on "demographic dividends" is revealing its limitations as technology progresses, social paradigms shift, and resources remain finite. Far from pushing China into crisis, a reduction in population might actually lay down a more solid and rational foundation for future growth.

To understand the dynamics at play, we first must clarify the concept of demographic dividends. Traditionally, this term referred to the phenomenon of a large influx of young laborers boosting economic growth. Yet, upon closer inspection, it becomes evident that demographic dividends largely benefit capitalists rather than ordinary workers. Within a capitalist system, a vast labor market generates cheap labor that reduces production costs and drives down prices. However, this phenomenon offers little direct advantage to low-income laborers. As automation and artificial intelligence advance rapidly, it's plausible that even a large number of workers may fail to propel economic growth as robustly as in the past, potentially leading to an oversaturated job market. This, in turn, could exacerbate social inequality and unfair resource distribution.

Take Russia as an illustrative example. Despite its landmass being almost twice that of China, its population is merely one-tenth that of its Eastern counterpart, yet it maintains its status as a global power. Similarly, countries like Australia, which boasts an expanse of land and abundant resources, has a population of under twenty million yet continues to exhibit steady economic development. These instances underscore that population size is not the sole determinant of a nation's competitiveness. Instead, the critical factor lies in how effectively resources are utilized and the focus on developing advanced technologies and industries.

The issue we often hear about revolves around the so-called "aging crisis" caused by population decline; however, the more pressing matter should be the "structure" of the population. Currently, China's primary challenge isn't merely a shortage of labor but rather an imbalance in the labor structure, particularly concerning the supply of young workers. A disproportionately low percentage of young people in the population, combined with a high proportion of elderly individuals, places significant strain on social services such as pensions, healthcare, and education.

In the long run, natural population decline acts as a self-regulating mechanism, signaling an adjustment in the supply and demand of labor. If this transition fosters technological innovation, enhances productivity, and optimizes welfare systems, the imbalances in population structure could indeed achieve a smooth landing. By driving technology-led upgrades in industries and reducing reliance on low-end labor, we might better tackle future employment challenges while alleviating the social pressures resulting from demographic changes.

The root of the reluctance among Chinese youth to marry and have children extends beyond personal choices, touching on deeper societal issues. The escalating costs associated with education, housing, healthcare, and elder care have become overwhelming burdens for young people. As these costs continue to rise, the ability to bear and raise children becomes increasingly difficult— a problem not merely confined to the individual level but deeply embedded in a societal and economic framework that fails to provide adequate support.

Compounding this issue is modern society’s narrow definition of success, wherein many equate “having children” with “financial burden.” In reality, if living costs could be reduced and public services improved, alongside the implementation of technological advancements to enhance productivity, young people's enthusiasm for childbirth would likely increase. A more equitable distribution of resources, coupled with a reduction in work-related stress, has the potential to naturally restore birth rates.

A critical and often overlooked reality is the adverse ecological impact of overpopulation. While China's demographic boom previously allowed the country to enjoy a demographic dividend over several decades, it also led to significant environmental degradation and resource depletion. Issues such as land degradation, water resource scarcity, and air pollution are rooted in the tension between a burgeoning population and limited resources.

By rationally adjusting population numbers alongside technological advancements and ecological preservation, China could feasibly achieve sustainable resource utilization in the future. A moderate decline in population might actually provide a greater scope for ecological restoration, thereby facilitating a win-win scenario for both social development and environmental conservation.

Technological advancement presents a unique opportunity as well. With the rise of artificial intelligence, automation, and robotics, demand for labor in traditional sectors is likely to diminish significantly, paving the way for new job categories to emerge. If China embraces technological innovations and pushes for structural upgrades, it could effectively navigate the challenges associated with declining population numbers. Additionally, technological developments can offer more efficient methods of production and living, enhancing overall societal well-being.

Moreover, as productivity on a per capita basis improves, societal wealth can be distributed more equitably, rendering population decrease no longer a burden. In the future, fewer people could mean that resources can be more effectively utilized, better satisfying individual needs across the board.

Looking ahead, the optimal population configuration for China may not adhere to the current figures of "1.4 billion" or "1.2 billion," but rather fall within the range of six to eight hundred million. Such a scale would facilitate better resource allocation, enhance welfare systems, spur technological innovations, and mitigate environmental pressures. Through judicious population management and economic structural adjustments, society can transition toward a more efficient and sustainable developmental trajectory.

As population levels gradually taper off, the equilibrium between labor supply and demand will become increasingly balanced, resulting in reduced societal pressures. Young people in China may no longer feel compelled to exhaust themselves merely for survival; they would have the freedom to chart their paths, naturally fostering a greater willingness to marry and procreate. Ultimately, this could usher in a more mature and harmonious phase of societal development, significantly enhancing the happiness and quality of life for the population at large.

In conclusion, population decline should not be perceived as a crisis but rather as an opportunity for restructuring societal and economic frameworks. It is imperative to break free from the superstition surrounding demographic dividends and to approach demographic trends with a rational mindset. Through technological innovation, thoughtful population management, and enhancements in social welfare systems, China can not only adapt to the challenges presented by a declining population but also seize the moment to cultivate a more prosperous future within a new societal context.

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