China’s population will continue to shrink

Significance

Policies in the 1980s to restrict the birth rate gave China a demographic dividend, with an enlarged working population driving GDP growth, but that has been exhausted. The country faces a shrinking working population and a growing dependent population. This creates economic challenges and threatens the solvency of the pension system.

Impacts

• Manufacturing industry will lean heavily on automation and robotics in response to an increasingly tight labour market.
• Providing adequate pension and health care provision for the elderly will hobble an already slowing economy.
• Education provision will have to address older age cohorts, to regularly boost their skills, rather than focusing solely on the young.