Co-authors: Wong Koi Nyen; Goh Soo Khoon
A large and young labor force has been instrumental in China's economic growth for several decades. The age structure of the population is shifting, however, with the population in the working age range of 15 to 64 declining steadily since 2015. A decades-long fertility rate of below replacement level and increasing life expectancy have produced a dramatic ageing of the population. Despite the government's introduction of pro-birth policies, the fertility rate remains low in 2023 at 1.7 per woman. The shrinking workforce is putting upward pressure on wages causing China to lose the low-cost advantage that has propelled its growth for so long. The rapid “graying” of the workforce over the next decade raises concerns about the future pace of economic growth. Such concerns were galvanized in 2022 when China's population declined year on year from 1.4126 billion to 1.4118 billion.