China has shifted from population increment to a decrease, says president Xi

• Necessary to establish, improve fertility support policies to promote long-term population development
• Efforts should be made to maintain a moderate fertility level and population size
• Necessary to better coordinate relation between population and economy
• To strengthen demographic statistics, dynamic monitoring, early warning and improve legal system for population and birth security

This is one of the least talked about topics when it comes to China. However, it perhaps is one that will be the most important in defining Xi’s legacy and his leadership. For some context, this is an issue that has been ongoing for quite a few years already:

• China’s population fell last year – the first time since 1961 (2023)
• China allegedly tries to keep it hush on growing demographic worries (2024)

Despite abandoning its one-child policy and making a shift to focus on common prosperity, things haven’t really turned back the other way for China and its aging demographic outlook.

As mentioned earlier in the year, all of this is a further indictment that the working class continues to prefer not having kids in this current generation. It’s a testament to how the general population feels about the quality of life and social satisfaction. And that is something that Xi desperately needs to address.

For now, this isn’t something that will see much immediate impact on China’s economy. But amid recent struggles, this issue here may just exacerbate the deepening concerns on the outlook over the next five to ten years at least.

The worst-case scenario is one that we all have come to be familiar with, that being the “lost decade” in Japan. Xi will ultimately want to steer China away from that path but given recent developments, he has a very big task ahead of him in the next decade.

This article was written by Justin Low at www.forexlive.com.