Will China’s Economy Collapse? The Hidden Threat: Demographic Crisis | EconoIQ

Will China’s Economy Collapse? The Hidden Threat: Demographic Crisis | EconoIQ

Hello! Today we’re going to talk 
about a very important issue that closely concerns the global economy: how 
China’s rapidly declining birth rates and aging population threaten the country’s future.
For years, China was the world’s manufacturing hub—cheap labor, a massive population, and 
a continuously growing economy. But now, the picture is changing. For the first time, 
China’s population has begun to shrink. In recent years, demographic trends 
such as falling fertility rates, an aging population, and a shrinking labor supply 
have threatened the sustainability of this growth. In 2023, China’s fertility rate 
dropped to its lowest level in history: only 0.95 children per woman. This rate 
is not only low—it’s dangerously low. For a country to maintain its population, 
this rate needs to be at least 2.1. Although China has become the world’s 
second-largest economy over the past decades, the country now faces a deep demographic crisis. Birth 
control policies, especially the long-running “one-child policy,” laid the foundation for 
today’s aging population and low fertility issues. How did China get here?
Of course, it didn’t happen overnight. In this video, we’ll explore how this problem 
emerged and what dangers lie ahead for China. ________________________________________
China’s Importance in the Global Economy Let’s first look at China’s 
role in the global economy: • By nominal GDP: China is the second-largest 
economy in the world after the United States (as of 2024, around $17–18 trillion).
• By purchasing power parity (PPP): China has already surpassed the U.S. and 
is considered the world’s largest economy. China alone accounts for a large 
portion of global production. It is the world’s largest producer in many 
sectors—electronics, textiles, toys, steel, solar panels, batteries, and auto parts.
Even giant brands like Apple, Tesla, and Samsung manufacture a significant 
portion of their products in China. ________________________________________
China’s Role in Global Population China held the title of the most 
populous country for many years. However, India surpassed China recently, pushing 
it to second place. Here are some basic facts: • China’s population: ~1.41 billion
• Global population: ~8.1 billion • This means 17.4% of the world’s population 
is Chinese—or 1 in every 6 people. China’s population started to decline in 
2022, and it’s projected to drop to around 800 million by 2100.
In summary: • China is still the second most populous country.
• But it now has a shrinking, not growing, population.
• This will affect not only China but also global economic and labor dynamics.
________________________________________ Why Did This Happen?
This situation dates back to the 1980s, when China implemented the 
one-child policy to curb rapid population growth. While this policy successfully slowed 
population growth for 30 years, it’s now coming back to haunt the country.
Today, many people in China do not want children or are delaying parenthood. Why?
• High cost of living and education • Prolonged education and career paths
• Women’s increasing participation in the workforce
• Urbanization and preference for solo living In other words, declining population 
isn’t just due to old policies—modern lifestyles also play a major role.
________________________________________ Historical Background: One-Child 
Policy and Population Control China’s population control policies began in 
the 1970s, fearing that a growing population would threaten economic progress. The 
one-child policy, implemented in 1980, restricted urban families to one child.
This sharply reduced birth rates in the short term but disrupted demographic 
balance over the long term: • Fertility rates fell rapidly 
due to the one-child policy. • As of 2023, the fertility rate 
dropped below 1 (about 0.95). • To sustain population, a rate of 2.1 is needed.
• Rising living costs, career concerns, and delayed marriages further worsen the trend.
• This has created age imbalance and population decline among those born in the 21st century.
________________________________________ China’s Current Demographics
Aging Population As of 2023, more than 20% of China’s 
population is over 60. By 2035, this is expected to exceed 30%. This increases 
the elderly dependency ratio and places a burden on social security systems, especially 
with a shrinking working-age population. Declining Fertility
Low fertility is not just due to past policies—it’s also driven by high costs of living, 
education, career priorities, and social shifts. Urbanization and Lifestyle Changes
Migration from rural to urban areas has weakened traditional large family structures. 
In cities, the cost of raising children is very high, which discourages parenthood.
________________________________________ Economic Impacts
Labor Market The shrinking working-age 
population is leading to: • Reduced production capacity
• Higher labor costs • Challenges for China’s 
role as the world’s “factory” Factories are struggling to find young workers. 
Labor costs are rising. As a result, production and economic growth are slowing.
Consumption and Growth Fewer young people = fewer consumers 
= slower economic momentum. GDP growth may lose its demographic support. An aging population means higher government 
spending on pensions and healthcare. We must remember:
• Younger people spend more—a declining youth population reduces consumption.
• Older people spend less—this slows the economy. • This effect is still mild but 
expected to grow significantly. Social Security Systems
Rising pension costs + fewer workers = serious strain on public finances.
The sustainability of the pension system is at risk. If this continues, state 
spending on healthcare and pensions will surge, creating a heavy burden.
________________________________________ What Does the Future Hold?
If trends continue, China may lose a quarter of its population by 2050.
By 2100, China’s population could be hundreds of millions less than today.
________________________________________ Policy Responses and Reforms
• In 2016, China ended the one-child policy and introduced the two-child policy.
• In 2021, it moved to a three-child policy. Other measures include:
• Cash incentives and tax breaks for childbirth • Support for women with both birth and career
• Raising the retirement age • Policies for AI and robotics-based labor 
replacement are starting to take shape Still, these policies have not yet 
significantly boosted fertility. People today don’t have children just because of 
incentives. This is a long-term societal shift. ________________________________________
Future Scenarios If Current Trends Continue:
China’s population could shrink by 50% by 2100, risking long-term stagnation 
like Japan. This would reduce China’s role in global supply chains.
If Reforms Succeed: If birth-boosting policies and labor gaps 
(through migration or tech) are effective, China could undergo a gradual demographic 
transformation. This is essential for long-term sustainable development.
________________________________________ Conclusion
In short, China is facing a demographic crisis. And this doesn’t just affect 
China—it affects the whole world. Production, exports, growth, and the global 
economy could all shift dramatically. What do you think—can China overcome this 
crisis? Leave a comment and let’s discuss! Don’t forget to like and subscribe! 
See you in the next video!

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China is facing a serious demographic crisis that could threaten its economic future. Once known for its large workforce and rapid growth, the country is now dealing with a shrinking population, declining birth rates, and an aging society. In 2023, China’s fertility rate fell to a historic low of 0.95 children per woman—far below the 2.1 rate needed to maintain population stability. Decades of strict birth control policies, such as the one-child policy, have contributed significantly to this challenge.

00:00 – Introduction: Why Is China in Crisis?
01:27 – China’s Role in the Global Economy
02:16 – China and the World Population: What Changed?
03:07 – How Did It Come to This?
03:51- One-Child Policy and Historical Background
04:43 – Today’s Demographics: Aging and Low Fertility
05:32 – Economic Impacts: From Production to Consumption
06:29 – Social Security and Public Spending
06:52- What Does the Future Hold?
07:01 – China’s Policy Responses and Reforms
07:41- Possible Future Scenarios
08:12- Conclusion and Call to Discussion

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