China’s population is projected to fall by about 60 million over the next decade, threatening economic activity in wealthier coastal provinces and putting growing pressure on the public pension system, according to recent analyst reports.
Research firm Rhodium Group estimated that the world’s second-most populous country, after India, could lose the equivalent of nearly France’s entire population over the coming 10 years.
In a nation of 1.41 billion people, a decline of this scale would weigh on labour productivity, consumption and social security, including in richer coastal provinces that have powered much of China’s growth over the past four decades.
“The country’s most developed provinces are seeing falling populations, which will impact overall consumption and the future productivity of the labour force,” wrote Allen Feng, associate director with Rhodium Group’s China markets research team and the report’s author.
The demographic decline is already feeding through into the economy, as smaller families and an ageing population place greater strain on elderly care. Fiscal subsidies to social security funds hit a record 2.9 trillion yuan (US$425 billion) last year, equivalent to 10.1 per cent of general budget spending, “and appears set to rise in the future”, Feng wrote.
“The impact on household consumption is obvious, but the larger problem for Beijing may be the hit to social security funds,” he added, noting that demographic pressures were also likely to contribute to weakening credit and lower interest rates.
One of the main drivers of the trend is a collapse in births. The 7.92 million babies born in China in 2025 marked a record low, down 17 per cent from a year earlier, while the country’s population shrank for a fourth straight year. Analysts have cited higher living costs and shifting social attitudes as reasons.
Soft labour market conditions and slowing income growth are also expected to reinforce the trend, according to the Rhodium Group report, published last week. Experience in other Asian economies, particularly South Korea and Japan, suggests that demographic pressures could weaken investment, increase deflationary pressures and put downward pressure on interest rates.
China, whose economy many analysts expect to grow this year at slightly less than the 5 per cent recorded in 2025, has stepped up efforts to counter these headwinds.
Some wealthier provinces reported population growth in 2025, following policy support and internal migration from other parts of the country, Goldman Sachs researchers said in a note published last week. The report cited the nationwide launch of a childbirth subsidy programme offering 3,600 yuan (US$528) annually per child up to three years of age.
Guangdong – China’s most populous province – recorded the country’s largest population increase last year, adding about 800,000 people, according to the researchers, citing data provider Wind. The province’s childcare subsidies also amounted to about 9 billion yuan (US$1.3 billion) last year, the Ministry of Finance said.
But the pattern was uneven across the country, with the Goldman Sachs analysts noting a “significant divergence” among regions. Those registering population gains included Zhejiang, a prosperous province south of Shanghai; Xinjiang in the northwest; and the island province of Hainan. By contrast, Hunan and Sichuan provinces posted sharp declines.
Jiangsu and Shandong provinces – both considered economic powerhouses – as well as Hebei, a major industrial centre, also saw their populations fall last year, according to the report. -- SOUTH CHINA MORNING POST
