China’s population will reduce to 80 crores by 2100, fear of global recession due to China’s declining population
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China can once again create trouble for the world. China, which is called the factory of the world, is facing many challenges these days. Experts have issued a warning regarding that. In the year 2023, the population of China has declined from 1.41 billion to 1.40 billion. According to the United Nations forecast, China’s population will decline to 1.31 billion by 2050. Then by 2100 it will reduce to about 80 crores. This is an important change and its impact will be seen all over the world.
There are two trends that underlie such demographic changes. First- Elderly population, in which the percentage of people aged 60 years and above is currently more than 20% of the total population. Second- decline in birth rate. One crore 78 lakh children were born in the year 2016, which will reduce to 90 lakh in 2023. Both these changes are not good for China’s economy. Experts have warned that if China’s economy is affected, it could affect the entire world. China’s declining population could cause a devastating global recession.
Pension system may go bankrupt by 2035
By 2040, more than a quarter of China’s population will be over 60 and less economically active. This will put pressure on China’s pension and elderly care systems. Some predictions indicate that the pension system could become insolvent by 2035. As older employees retire. There will be fewer people of working age in the total population, which may affect production in the future. This will affect China’s long-term economic growth and per capita gross domestic product. Productivity gains (GDP per employed person) may also be affected by a smaller workforce and aging. Some studies have found evidence that labor productivity (production per working hour) varies with age. It begins to increase as a person enters the labor market, then stabilizes between ages 30 and 40, and eventually declines as a person’s working life ends.
China will be forced to import
Population change can create ‘cycles of destruction’, where one economic situation causes negative impacts and then another and the next. As low productivity begins to impact production in particular sectors, China may be forced to increase imports to meet demand in those industries. This can significantly impact innovation and entrepreneurship, resulting in further loss of productivity. New ideas accelerate economic development. The size of the workforce affects innovation, because as the number of people employed decreases, the scope for new ideas narrows.
Prices will increase outside China
China is the world’s second-largest market, accounting for more than a third of world growth and the second-largest importer, so any changes will have global ramifications. For example, in Brazil and South Africa, which are important trading partners with China, these population changes may reduce demand for their exports. This could result in lower employment levels in those countries, as exporting companies would be forced to reduce operations. As productivity in China declines, its trading partners may be forced to import products from other economies, resulting in higher prices for their products. Furthermore, emerging economies such as Thailand and Vietnam that are dependent on Chinese outbound tourism will experience significant declines in all tourism-related sectors such as transportation and hospitality, as the effects of population change will reduce the number of people able to travel abroad. . Multinational corporations will also feel the decline in demand, as the Chinese consumer market is a major source of their revenue. The impact is likely to be global, as suppliers and workers around the world see jobs disappearing.
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