The Economic Implications of China’s Demographic Problems

Abstract

China is facing a major threat that is entirely internal: a shrinking population. China’s population growth is a key factor for its economic and financial expansion since the late 1970’s and has allowed its gross domestic product to become the largest in the world. But in recent years, China’s population has started a dangerous decline that worries its policymakers and can only get worse.

While China’s leaders have recently introduced policies to accelerate the birthrate, many analysts feel that this is too late to reverse a perilous trend. These analysts predict that a shrinking population will affect China from an economic and financial perspective that will eventually cause it to fall from its place as a major global economy.

The aim and purpose of this article is to examine the economic implications of China’s demographic problems.