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China Just Reported Its Lowest Birth Rate in Modern History

The Motley Fool logo The Motley Fool 1/18/2022 The Daily Upside
China Just Reported Its Lowest Birth Rate in Modern History © Provided by The Motley Fool China Just Reported Its Lowest Birth Rate in Modern History

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Video: Expect China to do better than developed and emerging markets in 2022: Investment management firm (CNBC)

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China's famed population policies have turned Bringing Up Baby into Gone Baby Gone. For the fifth year in a row, the birth rate in the world's most populous country fell in 2021, according to official data released Monday.

At 7.52 per 1,000 people, the number of babies born was the lowest since authorities started keeping track in 1949. The news throws a huge wrench in the ruling Communist Party's plans to increase Chinese wealth, already hampered by the fact that the country's powerhouse workforce has been shrinking for a decade.

Whoa, Steep Child D'ecline

China's government famously began imposing birth limits on families in the 1980s amid concerns the population was growing too fast, and threatening to strain resources. But, in a historic case of be careful what you wish for, by 2011 the country's working-age population peaked at 925 million and began falling way earlier than authorities had calculated.

Ironically, China is now struggling to convince families to have more kids, and last year told couples they could have up to three, plus get cash grants and extended maternity leave. But those efforts have come up short of the cradle, setting up fears of a long term demographic — and economic — crunch:

  • About 10.6 million babies were born in China in 2021, or 12% less than the 12 million in 2020 — it's also barely more than 2021's 10.1 million deaths.
  • The official working age population, those aged 16 to 59, fell to 882 million, or 62.5%, from 63.3% in 2020 and 70% a decade ago — this is especially important in China because its economy is reliant on labor-intensive farming and manufacturing.

Double Edged Sword: Beijing has a strict, no tolerance approach to Covid that has curbed pandemic outbreaks, but made it harder for partnerships to form. It's also slowed economic growth — on Monday, the government said China's economy grew 8.1% last year, but growth tumbled to 4% in the fourth quarter.

It's a Small World, After All: The world's other major economies are experiencing sluggish population growth, too. The U.S. population grew just 0.1% in the 12 months leading to July 2021, the lowest rate ever recorded.

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