China's shrinking population weakens its might to compete with US

China's ageing and shrinking population poses a massive threat to the country's economic growth and has a direct impact on its ability to compete with the United States and other strong economies.

China is on track to lose nearly one-half of its current population by the end of the century, Caliber.Az reports, citing the forecast by the American consulting firm Terry Group.

“Over the past few decades, China’s unusually favourable demographics have helped to propel its stunning economic rise. In the future, its deteriorating demographics threaten to place an ever-larger drag on economic growth. In this issue of Vantage Point, we discuss this reversal and the economic and geopolitical risks it poses,” the firm said.

Along with a shrinking population, China will also have an ageing population. As recently as 1990, just 5 per cent of Chinese were aged 65 and over. By 2050, that share will reach 30 per cent.

This year, the Chinese population for the first time in 60 years began to decline, and, by the end of the XXI century, the number of Chinese citizens will halve.

In addition, the percentage of elderly people in China is growing rapidly, and the share of working-age people, on the contrary, is falling.

“These demographic trends have profound implications for the size and shape of China’s government. The burgeoning elderly population, whose numbers will be approaching 400 million by 2050, will put an enormous burden on families, which still play a central role in retirement security in China. Inevitably, much of that burden will be shifted to the government as urbanization, industrialization, and declining family size force a vast expansion of China’s underdeveloped welfare state,” the report adds.