Over the past ten years, China’s population has grown at its slowest pace since the 1950s amid a plunge in births and a graying workforce, according to new government data. This presents one of the most significant social and economic challenges the country has seen in modern times, subject to similar aging trends as other developed nations like Japan or Finland.

The 2020 results of the country’s once-a-decade census showed that the population of mainland China rose by 5.38% to 1.41 billion. The average annual growth rate on the last decade was 0.53%, down from 0.57% between 2000 and 2010. The census was done in late 2020, with seven million census takers going door to door in China.

The proportion of people 15-59 years of age made up about two thirds of the population but dropped by about seven percentage points from 2010, the census showed. Meanwhile, people aged 60 or older rose by more than 5 percentage points. That means fewer workers will be supporting more retirees in the years to come.

The country, the world’s second-largest economy after the United States, had a fertility rate of 1.3 children per woman for 2020 alone, in line with aging societies like Japan and Italy.

“The aging of the population has further deepened, and in the coming period [we will] continue to face pressure for the long-term, balanced development of the population,” Ning Jizhe, head of China’s statistics office, said at a news conference presenting the results of the census.

The sharp deterioration in demographics will now put pressure on the Communist Party to ramp up incentives to couples to have more children. China introduced in the 1970s the “one-child policy” that limited most couples to one child but then in 2016 it decided to loosen that rule. Nevertheless, birthrates have not surged to previous levels.

China’s working-age population, people aged between 16 and 59, has also declined by 40 million as compared to the last census in 2010. China’s chief methodologist Zeng Yuping said that the total size “remains big” with 880 million but economists warn that going toward this could be a problem for China’s potential economic growth.

Upcoming challenges

While far larger than the entire population of the UK or France, China’s population increase is the smallest recorded since the first census was done in 1953. And the shortage of new births suggests this trend will continue. Only 12 million babies were born last year, the fourth year in a row that births have fallen in the country.

The current population dynamics could force Xi Jinping, the country’s top leader, to reconsider the Communist Party’s family planning policy, which is among the world’s most intrusive. Liang Jianzhang, a research professor of applied economics at Peking University, told the New York Times that this is a “long-term time bomb” for China.

Presenting the results, Ning acknowledged that government policies affected fertility but said that improved living standards and changing social attitudes were playing an increasingly important role, as they have elsewhere. Low fertility is a problem faced by most developed countries, and it will also be a problem for China, he acknowledged.

As countries become more developed, birth rates tend to fall due to education or other priorities. China’s neighboring countries Japan and South Korea have seen birth rates fall to record lows in recent years despite various government incentives for couples to have more children. Last year, South Korea saw more deaths than births for the first time in history.

“It doesn’t take published census data to determine that China is facing a massive drop in births,” Huang Wenzheng, a demography expert at the Center for China and Globalization, a Beijing-based think-tank, told Reuters. “Even if China’s population didn’t decline in 2020, It will in 2021 or 2022, or very soon.”

A new 5-year plan adopted by China in March calls for reducing the burdens of having, raising, and educating children by improving child care services and parental leave policies. Parents still face fines if they have more than two children. In an op-ed last year, economist Liang Jianzhang recommended building a “fertility-friendly society” with subsidies and incentives.

The government is also discussing the possibility of raising the retirement age, among the world’s lowest at 60 for men and 50 for most women, to ease pressure on the underfunded pension system. But the opposition has been widespread. Young Chinese adults worry job competition would increase, while older adults fear they might not find a job as younger works are preferred.