GS Paper - 2 demographics

The demographics of the world's most populous country is set to change as China will experience a negative growth after 2025, which will result in shortage of consumer demand, a well-known Chinese economist has cautioned. China's population is set to peak in just four years' time and the milestone will be marked by a significant downturn in consumer demand, said Cai Fang, a member of the monetary policy committee of the People's Bank of China, the central bank.


  1. According to a PBOC study released recently, China should immediately liberalise its birth policies or face a scenario in which it has a lower share of workers and higher burden of elderly care than the United States by 2050.
  2. In a rare frank appraisal, four researchers from the PBOC said the country should not interfere with people's ability to have children or it will be too late to reverse the economic impact of a declining population.
  3. Since 2016, Chinese couples have been allowed to have two children.
  4. The birth liberalisation should happen now when there are some residents who still want to have children but can't. It's useless to liberalise it when no one wants to have children, it said.
  5. After implementing the controversial one-child policy for over three decades, China is facing a demographic crisis with a rapidly ageing population over 60 years.
  6. The two-child policy, which was implemented from 2016 failed to make an impact on the low birth rates as the number of newborns dropped by two million in 2018.
  7. China as a whole saw 580,000 fewer new-borns in 2019 compared to 2018, marking the third consecutive year of decline since the implementation of the universal two-child policy in the mainland.
  8. The government should also do more to stimulate consumption among low-income groups that had a higher propensity for spending than the wealthy.